Question
The spot price of corn is $9 per bushel and the cost of storing a bushel of corn for two years is $1, payable at
The spot price of corn is $9 per bushel and the cost of storing a bushel of corn for two years is $1, payable at the end of the second year. If the risk-free rate is 6.5% per annum with continuous compounding, what is the upper bound for the two-year futures price of corn?
| $10.25 | ||
| $8.25 | ||
| $11.25 | ||
| $13.25 |
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Multinational Financial Management
Authors: R M Srivastava
1st Edition
8174466703, 9788174466709
