Find six month maturity futures price

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Silver has no convenience yield, and it sellf for $20 per ounce. The risk free rate is 0.15% per month. There is no dividend with silver.

1. Find 6-month maturity futures price.

2. Find 12- month maturity futures price.

3. Is the contract trading in contango or backwardation?

4. Given that the 6-month futures price for silver was $22.40, and spot is $20 as in the scenario above with risk free rate at 0.15% per month, when you construct a hedged portfolio to arbitrage the conditions, what profit would you expect to lock in?

Reference no: EM131535283

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