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It is December 2022, and the spot price of corn is $6/bushel. The June 2023 corn futures contract price is $6.50/bushel. The risk-free rate is
It is December 2022, and the spot price of corn is $6/bushel. The June 2023 corn futures contract price is $6.50/bushel. The risk-free rate is 4%. Assume the FV of six-month corn storage costs are $0.20/bushel. You are a grain merchant, and own corn that is now stored in a silo. If you expect that the price of corn will fall over the next six months, it makes more sense to
Question 5 options:
Sell June futures contracts on corn
Sell corn now in the spot market
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