Financial Risk Manager Part 1

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Explanation:

For a commodity forward under the cost-of-carry model:

F_0 = S_0 e^{(r+u-y)T}

If only the storage cost changes, the proportional change in the forward price is driven by the change in $u$ :

\frac{F_{new}}{F_{old}} = e^{(u_{new}-u_{old})T}

Here:

So:

\frac{F_{new}}{F_{old}} = e^{0.08 \times 0.5} = e^{0.04}

Percentage increase:

e^{0.04}-1 \approx 0.0408 = 4.08\%

Therefore, the nearest answer is +4.08%.

Explanation:

For a commodity forward under the cost-of-carry model:

F_0 = S_0 e^{(r+u-y)T}

If only the storage cost changes, the proportional change in the forward price is driven by the change in $u$ :

\frac{F_{new}}{F_{old}} = e^{(u_{new}-u_{old})T}

Here:

So:

\frac{F_{new}}{F_{old}} = e^{0.08 \times 0.5} = e^{0.04}

Percentage increase:

e^{0.04}-1 \approx 0.0408 = 4.08\%

Therefore, the nearest answer is +4.08%.

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MManit

Last updated: April 18, 2026 at 11:32

Zero

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Not enough information (need risk-free rate and exact spot price)

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