Why american call options on futures could be exercised

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Reference no: EM131324139

On September 26 the spot price of wheat was $3.5225 per bushel and the price of a December wheat futures was $3.64 per bushel.

How do you interpret the futures price if there is no risk premium in the futures market?

Explain why American call options on futures could be exercised early when call options on the spot are not. Assume that there are no dividends.

Reference no: EM131324139

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