Spot market price for west texas intermediate crude oil

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1. The spot market price for West Texas intermediate crude oil is $53.01 per barrel. Crude oil storage costs are $0.90 per year payable in advance. If the 6-month risk free interest rate is 1.65%, what is the 6-month forward price for oil? (Assume that storage costs are pro-rated for periods of storage less than one year.)

2. The spot market price for corn is $3.56 per barrel. Storage costs for corn are $0.08 per bushel for the first three months payable in advance, and $0.028 per month payable at the beginning of each additional month. Corn shrinks in storage due to a decline in its moisture content. Total expected shrinkage in 6-months is 0.35%. What is the 6-month forward price for corn?

Reference no: EM131456078

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