An investor sells six July futures contracts on orange juice. Each contract is for delivery of 15,000 pounds. The current futures price is 167 cents per pound. What is the greatest price below which the investor would be able to withdraw $4,500 from the margin account? (Assume that the investor's balance never touches the maintenance margin and hence there are no margin calls.)

Select one:

a.160 cents per pound

b.161 cents per pound

c.162 cents per pound

d.163 cents per pound

e.164 cents per pound

Consider a commodity that is used in production to manufacture other products. You can buy the commodity, but you cannot short sell it because producers who have it in their stock are unwilling to lend it; they would much rather have it in their stock for its convenience yield rather than lend it. If the current price is $100 and the simple interest rate is 5% per annum, what is the one-year forward price F(0, 1) that rules out any arbitrage possibilities?

Select one:

a.F(0, 1)

105

b.F(0, 1)

105

c.Both of the above

d.None of the above

A metal costs $0.10 per month to store (which is paid upfront) but gives a convenience yield worth $0.12 per month (which is received at maturity). If the metal's sport price is $150 per pound and the continuously compounded interest rate is 5% per annum, what is the six-month forward price?

Select one:

a.$150.98

b.$151.37

c.$152.48

d.$153.69

e.$154.82