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Suppose that wheat can be stored at 2 0 cents per bushel per year ( paid at the beginning of the year ) and the
Suppose that wheat can be stored at cents per bushel per year paid at the beginning of the year and the risk free interest rate is per year with contin uous compounding.Each wheat futures contract is for bushel of wheat and the price is listed in cents. If the futures price for the October contract is and the futures price for the October contract is How would you make money by trading the October and October contracts? How much money can you make for each October contract? hint: the cost of carry should be incorporated into calculating the forward price
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