commodity forwards
why we borrow at Q1 & 3, and why we do NOT borrow at Q2?作者: liangfeng 时间: 2011-7-11 19:37
kurmanal Wrote:
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> In the 2nd question are calculating what the
> risk-free rate should be to borrow the funds..
>
> In the other questions, are given that rate..
You mean what is the risk-free rate implied in the forward price ? If so, I get it.作者: lcai 时间: 2011-7-11 19:37
sorry, I missed "we" in both sentences.. %)
yes, that is the implied rate in the forward price..to avoid any arbitrage
