Learning objectives: Compute the forward price of a commodity with storage costs. Explain how to create a synthetic commodity position and use it to explain the relationship between the forward price and the expected future spot price. Explain the impact of systematic and nonsystematic risk on...
Learning objectives: Calculate, using the cost-of-carry model, forward prices where the underlying asset either does or does not have interim cash flows. Describe the various delivery options available in the futures markets and how they can influence futures prices. Explain the relationship...
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