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Where r is the interest rate assumed constant and there are

Suppose that F1 and F2 are two futures contracts on the same commodity with times to maturity, t1 and t2, where t2 > t1. Prove that

F2 = F1er(t2-t1),

where r is the interest rate (assumed constant) and there are no storage costs. For the purposes of this problem, assume that a futures contract is the same as a forward contract.

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Macroeconomics: Where r is the interest rate assumed constant and there are

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Solution Preview :

Prepared by a verified Expert

Macroeconomics: Where r is the interest rate assumed constant and there are

Reference No:- TGS0659753

Have a Question? (oR Write a Review)

Recent Questions Asked Macroeconomics

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Solution Preview :

Prepared by a verified Expert

Macroeconomics: Where r is the interest rate assumed constant and there are

Reference No:- TGS0659753

Recent Questions Asked Macroeconomics

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