Fair Value of a Futures Contract

A trader is evaluating the pricing of a futures contract for a commodity with a current spot price of $150 per unit, an annual risk-free interest rate of 5%, and a storage cost of $2 per year. The time to maturity of the futures contract is 1 year. The trader needs to determine the fair value of the futures contract.

The fair value of the futures contract can be calculated using the formula:

F = S * e^(rT) + C

Where:

• F = Futures price
• S = Spot price of the underlying asset
• r = Risk-free interest rate
• T = Time to maturity in years
• C = Carrying costs (if any)

Based on this information, what is the fair value of the futures contract?