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1. Suppose that the current crude oil price is $2000 per barrel. The required costs for storing one barrel of oil for one year are
1. Suppose that the current crude oil price is $2000 per barrel. The required costs for storing one barrel of oil for one year are $10. Some airline company wishes to buy crude oils 5 years at a predetermined price from 5 years now. The interest rate is 2%. In this situation, what is the fair delivery price of oil of that forward contract?
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