What is the theoretical one-year forward price of oil

Reference no: EM13299772

The price of oil is $100 per barrel. Oil prices are expected to grow at 4% per year. The one-year risk-free rate of interest is 2% in simple terms. It costs $1 to store a barrel of oil for one year. If oil has no costs or benefits of carry, what is the theoretical one-year forward price of oil?

Reference no: EM13299772

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