Question
Suppose that on Nov 1st the price of corn is $2.50/bushel, the effective monthly interest rate is 1%, and storage costs per bushel are $0.05/month.
Suppose that on Nov 1st the price of corn is $2.50/bushel, the effective monthly interest rate is 1%, and storage costs per bushel are $0.05/month. You know that corn is stored from Nov 1st to Feb 1st. Can you price the Feb 1st forward contract on one bushel of corn as of Nov 1st ?
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The Commercial Aircraft Finance Handbook
Authors: Ronald Scheinberg
1st Edition
1781372608, 978-1781372609
