3.) It's January 10. The futures price on a March wheat contract, which expires in 73 days, is $4.07 per bushel and the spot price of wheat is $3.95 per bushel.

The annual risk-free-rate is 5%.

Assume there's no convenience yield on wheat.

The annual required return is 11%.

a.) What are storage costs over this 73-day period for a bushel of wheat?

b.) What is the expected spot rate of wheat at contract expiry?

c.) What is the expected futures price at contract expiry?

d.) Is the futures contract currently in normal backwardation?

e.) If both storage costs and convenience were zero then would the futures contract current be in nornmal backwardation? Assume that risk-free-rate and required return are unchanged.