1. A farmer expects that next year there will be a bumper crop (excess supply), this will cause prices to drop. He produces tomatoes, which todays current price for a bushel of tomatoes is $105.

1. If the risk free rate is 4% and tomatoes pay no dividends, use the spot future equation to estimate the one year futures price?
2. If the F₀=115 how can you, an outsider, make a riskless gain, assuming that it is possible?