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3. The price of oil is $100 per barrel. Oil prices are expected to grow at 4% a year. The oneyear riskfree rate of interest

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3. The price of oil is $100 per barrel. Oil prices are expected to grow at 4% a year. The oneyear riskfree rate of interest is 2% in simple terms. It costs $1 to store a barrel of oil for one year. If oil has no costs or benets of carry, What is the theoretical oneyear forward price of oil? (c)

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