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A small juice packaging company must secure a maximum 90-day price for a ton of orange, which currently has a sot price of $ 5,000
A small juice packaging company must secure a maximum 90-day price for a ton of orange, which currently has a sot price of $ 5,000 / ton. You know that the cost of storage is 4% (annually) of the asset's value and that the risk-free rate is 8%. At what price should you pay the ton of orange if you sign a forward contract with your bank?
a) 4,814.81
b) 5,151.00
c) 5,192.31
d) 5,616.00
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