Question
The spot price of aluminum is S = $4.00 per lb; the 9-month futures price is F = $4.10 per lb; storage costs are compounded
The spot price of aluminum is S = $4.00 per lb; the 9-month futures price is F = $4.10 per lb; storage costs are compounded continuously at 1% per annum; and the 9-month riskfree rate is 7% per annum. A. What is the theoretical 9-month futures price (F*)? Describe any arbitrage opportunities. B. Given this situation, show how to compute the convenience yield on aluminum.
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Crypto Rich A Millenial S Guide To Cryptocurrency And Investing Basics
Authors: Michelle Lilly ,Knowledge Smith ,Imani Smith ,Xavier Odili
1st Edition
1639726470, 978-1639726479
