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1.The spot price of a commodity is $50 per unit. The continuously compounded interest rate is 6%, the storage costs are 0.5% of the price

1.The spot price of a commodity is $50 per unit. The continuously compounded interest rate is 6%, the storage costs are 0.5% of the price of asset per annum (continuously compounded). If the 1-year forward price is $52.695, what is the convenience yield?

A. 0.95%

B. 1.05%

C. 1.15%

D. 1.25%

E.None of the above

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