Spot price of corn is $5.167/bu and the interest rate for 7 months is 2.82%. Storage...
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Spot price of corn is $5.167/bu and the interest rate for 7 months is 2.82%. Storage cost is 0.3% of the asset value per month paid upfront. Assuming no transaction cost and no difference is borrowing and lending rates, determine the no-arbitrage price of a 7-month futures contract on corn. Spot price of corn is $5.167/bu and the interest rate for 7 months is 2.82%. Storage cost is 0.3% of the asset value per month paid upfront. Assuming no transaction cost and no difference is borrowing and lending rates, determine the no-arbitrage price of a 7-month futures contract on corn.
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