Find the arbitrage-free forward price of corn

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Reference no: EM131059059

The spot price of corn is $2.24 per bushel. The risk-free interest rate is 5% nominal annual compounded every two months. The storage costs for corn are $0.03 per month per bushel, paid at the end of each month. Find the arbitrage-free forward price of corn (per bushel) for a five months forward contract.

A. $2.14 B. $2.24 C. $2.30 D. $2.36 E. $2.44

Reference no: EM131059059

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