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**Question 19** The spot rate for a commodity is $19. The annual lease rate for the commodity is 5%. The appropriate annually compounded annual risk-free rate is 6.5%. Which of the following amounts is closest to the 3-month commodity forward price? | Financial Risk Manager Part 1 Quiz - LeetQuiz

Explanation:

The 3-month forward rate is calculated as follows:

F_{0,T} = S_0 \times \left[ (1 + r) / (1 + \delta) \right]^T = 19 \times \left[ (1.065) / 1.05 \right]^{0.25} = 19.07

(Book 3, Module 37.2, LO 37.f)

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Question 19

The spot rate for a commodity is `$19`. The annual lease rate for the commodity is 5%. The appropriate annually compounded annual risk-free rate is 6.5%. Which of the following amounts is closest to the 3-month commodity forward price?

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Financial Risk Manager Part 1

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Question 19 The spot rate for a commodity is $19. The annual lease rate for the commodity is 5%. The appropriate annually compounded annual risk-free rate is 6.5%. Which of the following amounts is closest to the 3-month commodity forward price?

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Question 19

The spot rate for a commodity is `$19`. The annual lease rate for the commodity is 5%. The appropriate annually compounded annual risk-free rate is 6.5%. Which of the following amounts is closest to the 3-month commodity forward price?