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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%
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