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