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The spot price of gasoline is 258 cents per gallon and the annualized risk free interest rate is 2.0% Given a continuously paid storage rate
The spot price of gasoline is 258 cents per gallon and the annualized risk free interest rate is 2.0% Given a continuously paid storage rate of 0.5%, and a convenience yield of 0.9%, what is the no-arbitrage price range of a 1-year forward contract (in cents)? 259.55 to 264.53 259.55 to 266.92 262.16 to 264.53 264.53 to 266.92
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