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?