On September 26 the spot price of wheat was $3.5723 per bushel and the price of a December wheat futures was $3.69 per bushel.
The interest foregone on money tied up in a bushel until expiration is $0.03 and the cost of storingthe wheat is $0.03 per bushel.
The risk premium is $0.0875 per bushel
a) What is the expected price of wheat on the spot market in December?
b) Show how the futures price is related to the spot price
c) Show how the expected spot price at expiration, your answer I part a is related to the futures price today.