Question
The current price of a commodity is $75. The interest rate is 8% per annum and the storage costs are 1.75% per annum, all rates
The current price of a commodity is $75. The interest rate is 8% per annum and the storage costs are 1.75% per annum, all rates are continuously compounded. If the 2-year forward price of this commodity is $67.86, then the convenience yield is ______.
a.14.75%
b.15.75%
c.16.75%
d.11.75%
e.12.75%
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Multinational Financial Management
Authors: Alan C Shapiro, Paul Hanouna
11th Edition
1119559901, 9781119559900
