Question: How to pricing the future contract over times. For example the spot price at t=0 is $1050, risk free rate is 7%, time to maturity

How to pricing the future contract over times. For example the spot price at t=0 is $1050, risk free rate is 7%, time to maturity is 20/52( it will change each week) Dividend yield is 5%. the storage cost is 1%

week

spot price Future Price(Vanilla) Future price receives dividend Future price pay storage cost
0 1050
1 1057
2 1045
3 1049
4 1059

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!