Suppose that: (i) the spot price of wheat today is $10.00 per bushel, (ii) markets are frictionless, (iii) the interest factor for borrowing and lending over the next six months is 10%, and (iv) the convenience yield for holding wheat is zero. Arbitrage opportunities are absent.

A. The forward price for wheat will equal $10.90 if wheat is available for storage at $0.90 per bushel (payable upon delivery, in six months).

B.The forward price for wheat will equal $9.10 if wheat is available for storage at $0.90 per bushel (payable upon delivery, in six months).

C.The forward price for wheat will be equal to $11.00 if wheat is available for storage at zero cost

D. Cannot be determined

The forward price for wheat will be less than $10.00 if wheat is available for storage at zero cost