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(Show working) - A hedger sells a three-month forward contract on 794 barrels of oil at $70 per barrel. One month later, the spot price

(Show working) - A hedger sells a three-month forward contract on 794 barrels of oil at $70 per barrel. One month later, the spot price of oil is $71 per barrel and the risk-free rate is 7% p.a. (c.c.). What is the value of the forward contract? Assuming there is no storage cost or convenience yield associated with the oil asset.

Selected Answer: [None Given]

Correct Answer: -1,438.67 0.5%

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