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The spot price of corn is $2.45 per bushel. The opportunity cost of capital for an investor is 0.3% per month. If storage costs of
The spot price of corn is $2.45 per bushel. The opportunity cost of capital for an investor is 0.3% 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 3 month forward contract? Explain why you believe your answer is correct using words as well as equations.
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