Alloyum costs 010 per month to store which is paid upfront


Question: Alloyum costs $0.10 per month to store (which is paid upfront) 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 for Alloyum?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Alloyum costs 010 per month to store which is paid upfront
Reference No:- TGS02253549

Expected delivery within 24 Hours