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Suppose the spot price of oats (a pure consumption commodity) is $8 per bushel. There...

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Finance

Suppose the spot price of oats (a pure consumption commodity) is $8 per bushel. There are no storage costs. The interest rate is 4 percent per year with continuous compounding. The actual quoted forward price is $7.70 per bushel for five months. Compute the implied convenience yield, y, of oats.

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