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What is the theoretical one-year forward price of oil

The price of oil is $100 per barrel. Oil prices are expected to grow at 4% per year. The one-year risk-free rate of interest is 2% in simple terms. It costs $1 to store a barrel of oil for one year. If oil has no costs or benefits of carry, what is the theoretical one-year forward price of oil?

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Finance Basics: What is the theoretical one-year forward price of oil

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the theoretical one-year forward price of oil

Reference No:- TGS0674411

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : How to realize the greatest increase in profits

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the theoretical one-year forward price of oil

Reference No:- TGS0674411

Recent Questions Asked Finance Basics

Q : How to realize the greatest increase in profits

Q : Determining the current ytm of the bonds

Q : Explain the major points of the article

Q : What is the current value of the expected cash flow stream

Q : What is the theoretical one-year forward price of oil

Q : Define the idea of a just war

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