What is the convenience yield

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The price on a 1-year futures contract on a consumption asset is $1024.95/unit while the spot price of the asset is at the same time $900/unit. The current level of the appropriate interest rate is 15%, while the storage cost is 5% per annum. a) What is the cost of carry here? b) What is the convenience yield?

Reference no: EM132014429

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