The forward price of corn for delivery in three months is, Ask an Expert

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The forward price of corn for delivery in three months is $5.92 per bushel, while the spot price is $5.90. The three-month interest rate is 6% per annum. Is there an arbitrage opportunity in this market if corn may be stored costlessly? If so, show the cash flows involved in the arbitrage and show how you would take advantage of this opportunity.

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Financial Management, Finance

Category:- Financial Management
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