What is an upper bound for the one-year futures price of oil

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The spot price of oil is $59 per barrel and the cost of storing a barrel of oil for one year is $3.9, payable at the end of the year. The risk-free interest rate is 2.3% per annum, continuously compounded. What is an upper bound for the one-year futures price of oil? Your answer should be correct to one decimal place. Assume there are no transaction costs involved in arbitraging over-priced futures contracts.

Reference no: EM133412372

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