Alloyum costs $0 10 per month to store (which is paid up front) but gives a convenience yield of $0 12 per month (which is received on the maturity date) If its spot price S is $200 per ounce and the continuously compounded interest rate r is 5 percent per year, what is the five month forward price...

The data Today is time zero and the forward matures afte ...

Alloyum costs $0.10 per month to store (which is paid up front) but gives a convenience yield

Question:

Alloyum costs $0.10 per month to store (which is paid up front) but gives a convenience yield of $0.12 per month (which is received on the date). If its spot price S is $200 per ounce and the continuously compounded interest rate r is 5 percent per year, what is the five- month forward price for Alloyum?
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...