A commoditys spot price as of December 31 is $46/unit, and storage costs are $0.84/unit at the
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Question:
A commodity’s spot price as of December 31 is $46/unit, and storage costs are $0.84/unit at the end of every month l, starting January 31. if the effective monthly interest rate is .9% (compounded monthly, not continuously), what will be the forward price for delivery at the end of August, assuming the commodity is stored?
Expert Answer:
To calculate the forward price for delivery at the end of August we need to consider the cost of sto... View the full answer
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