6. A commoditys spot price as of December 31 is $36/unit, and storage costs are...
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6. A commoditys spot price as of December 31 is $36/unit, and storage costs are $0.72/unit at the end of every month, starting January 31. If the effective monthly interest rate is 0.9% (compounded monthly, not continuously), what will be the forward price for delivery at the end of August, assuming the commodity is stored?
a. $44.78
b.$44.62
c. $44.44
d. $41.94
e. $44.86
7. Suppose the spot price of a commodity is $27 per unit. The 3, 6, 9, and 12-month forward prices for the commodity are $27.31, $27.63, $27.95, and $28.27, respectively. This forward curve is an example of...
a.contango.
b. neither contango nor backwardation.
c. both contango and backwardation.
d. backwardation.
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b.$44.62
a.contango.