Question: Question 1 (Pricing a forward contract with dividends) The current price of silver is $206 per ounce. The storage cost is $1 ounce per year,

Question 1

(Pricing a forward contract with dividends)

The current price of silver is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9% compounded quarterly, what is the theoretical forward price of silver for delivery in 9 months?

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