Convenience yield for the july corn futures contract

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Reference no: EM132041184

The spot price of yellow corn is $6.34 per bu. The futures price of the July corn futures is $6.38 per bu. This futures contract expires in 4 months. Suppose that the annual storage cost of corn is $0.85 per bu. The continuously compounded 4-month risk-free rate is 1.31% per year. Assume that corn is a true consumption commodity. What is the convenience yield for the July corn futures contract?

Reference no: EM132041184

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