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Suppose that the price of corn is risky, with a beta of 0.3. The monthly storage cost is $0.03 per bushel, and the current spot
Suppose that the price of corn is risky, with a beta of 0.3. The monthly storage cost is $0.03 per bushel, and the current spot price is $2.97, with an expected spot price in three months of $3.13. If the expected rate of return on the market is 1.6% per month, with a risk-free rate of 0.9% per month, what is the expected futures cost? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Would you store the corn for three months?
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