Solved

When Answering the Questions Below, Refer to the Following Table

Question 13

Multiple Choice

When answering the questions below, refer to the following table of commodity forward and spot prices. The annual risk free interest rate is 4.0%.
 Expiration  Time  Pork Bellies  cents/pound  Com  cents/bushel  Soybeans  cents/bushel  Today=spot 5402124306 months 56020844012 months 59020345218 months 62520044524 months 655195437\begin{array} { l c c c } \begin{array} { r } \text { Expiration } \\\underline {\text { Time }}\end{array} & \begin{array} { c } \text { Pork Bellies } \\\underline {\text { cents/pound }}\end{array} & \begin{array} { c } \text { Com } \\\underline {\text { cents/bushel }}\end{array} & \begin{array} { c } \text { Soybeans } \\\underline {\text { cents/bushel }}\end{array} \\\text { Today=spot } & 540 & 212 & 430 \\6 \text { months } & 560 & 208 & 440 \\12 \text { months } & 590 & 203 & 452 \\18 \text { months } & 625 & 200 & 445 \\24 \text { months } & 655 & 195 & 437\end{array}
-What is the approximate annualized lease rate on the 12-month corn forward contract?


A) 0.00%
B) 2.25%
C) 4.50%
D) 8.25%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents