Problem
Spot price of crude oil is 83.84/bbl. The total interest rate on six-month loans and deposits is 0.84%. The storage cost is 0.33% of the asset value per month paid at the end of the storage period. Assuming no transaction cost, determine the no-arbitrage price for a crude oil futures contract maturing six months from now
Spot price of wheat is $5.3025/bu. The total interest rate on seven-month loans and deposits is 1.12%. The storage cost is $0.4200/bu per year prorated for the length of the storage period and paid upfront. Assuming no transaction cost, determine the no-arbitrage price for a wheat futures contract maturing seven months from now.