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The spot price ofa widget is $70.00 per unit. Forward prices for 3,6,9, and 12 months are $70.70,$71.41,$72.13, and $72.86. Assuming a 5% continuously compounded
The spot price ofa widget is $70.00 per unit. Forward prices for 3,6,9, and 12 months are $70.70,$71.41,$72.13, and $72.86. Assuming a 5% continuously compounded annual risk-free rate, is this an example of contango or backwardation? Contango and backwardation None of these Contango Backwardation
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