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Suppose that the November price of corn is $3.50 per bushel, the risk-free rate is 1.1% per annum and storage costs per bushel are $0.60/month.
Suppose that the November price of corn is $3.50 per bushel, the risk-free rate is 1.1% per annum and storage costs per bushel are $0.60/month. Assuming corn is stored from November to February, the February forward price must compensate owners for interest and storage costs. Calculate the February forward price for corn if the storage costs are paid in arrears.
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