Question
Copper spot price is $5.00 a pound. The cost of carry for copper is 7.00% and the current riskfree rate is 8.00%. The future price
Copper spot price is $5.00 a pound. The cost of carry for copper is 7.00% and the current riskfree rate is 8.00%. The future price is $5.25 for delivery in 1-year. What is the convenience yield on copper? (Please SHOW ALL WORK) (I know the answer is C)
A) -2.758%
B) 1.495%
C) 2.121%
D) 3.121%
E) 4.879%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Creating Financial Value A Guide For Senior Executives With No Finance Background
Authors: Malcolm Allitt
1st Edition
1472922719, 978-1472922717
