Question
The spot price of corn is $2.23 per bushel. The opportunity cost of capital for an investor is 0.5% per month. If storage costs of
The spot price of corn is $2.23 per bushel. The opportunity cost of capital for an investor is
0.5% per month. If storage costs of $0.04 per bushel per month are factored in, all else being
equal, what is the likely price of a 4-month forward contract?
A) $2.114
B) $2.124
C) $2.212
D) $2.231
Answer: A
I need some help on the calculation. Thank you
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Personal Finance
Authors: Jeff Madura
7th Edition
0134989961, 978-0134989969
