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Homework Problem: Assignment 1, Problem 10 Cost of Carry Model The spot price of Francium S is currently $342,000,000 per ounce, and the continuously compounded
Homework Problem: Assignment 1, Problem 10 Cost of Carry Model The spot price of Francium S is currently $342,000,000 per ounce, and the continuously compounded interest rate r is 4 percent per year. For each question, determine the correct forward price using the cost of carry model. 1. Assume there are no intermediate cash flows. What is the six-month forward price for Francium? 2. Suppose Francium costs $100,000 per month to store (which is paid upfront), but owning Francium gives a convenience yield of $300,000 per month (paid at maturity). What is the five-month forward price for Francium
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