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An oil importer is thinking to hedge against future pric He decided to enter into...

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Finance

An oil importer is thinking to hedge against future pric He decided to enter into a Long futures oil Contract, given the Current spot price is $60/barrel, and each barrel requires $2 storage Cost per barrel every two months. if The - Contract matures in 9 months, the free rate is given at 4% per annum Compounded quarterly. After 4 months the oil price is realized at $75/barrel, and the storage cost agreement has charged to become 3% of the oil price paid annually, and the interest rate has also charged to 5% annually Contineously Compounded What is the Value of the Contract?

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