The spot price of natural gas is $4.08 per MMBtu, which cost…

The spot price of natural gas is $4.08 per MMBtu, which costs $0.04 per MMBtu to store per month (payable at the start of the month). The risk-free rate has a flat term structure with a rate of 4.90 percent per year for all maturities. What is the highest possible arbitrage-free price for a two-month contract?

Consider the following three wheat futures contracts: May 2…

Consider the following three wheat futures contracts: May 2025 delivery May 2026 delivery May 2027 delivery Currently wheat has no convenience yield, but substantial storage costs. If the three contracts trade at the upper bound of their arbitrage-free trading range, which of the following is true regarding their delivery prices?