 In this section, I will explain the concept of the implied cost of carry. So the implied cost of carry is defined as the various types of costs that are associated with carrying value of an investment. So there can be different types of financial costs which you have to pay in the form of the various interest rates. Suppose if you have borrowed some money in order to make an investment, then the interest rate that you are going to pay for that will be accounted for as the cost of carry. And then there could be, if a physical asset is being purchased or the investment is being made on a physical asset like wheat or gold or silver or any such thing, then we will have to account for the storage cost also and that will also be included in the implied cost of carry. So implied cost of carry can be calculated by using this very simple formula where we subtract the spot price from the forward price to find out the value of the implied cost of carry. And if we know that we are going to pay some interest rates and then at the top of it we are going to pay the storage cost also, then the forward price will be equivalent to the spot price multiplied by 1 plus R plus S where R is the risk-free interest rate, S is the storage cost, this little s and this capital S is the spot price. So by using this particular formula and solving it for little s, we can find out the implied cost of storage also and that would be simply the difference between the forward price minus the spot price divided by the spot price minus the risk-free interest rate. So we use this formula to find out the storage cost. So I am going to explain this concept using an example. Suppose we are going to invest in gold and the spot price of gold given in the market is $300 per ounce and we are intending to make an investment for one year. So the forward price is $334 for one ounce and again we also found out the risk-free interest rate which turned out to be, we are assuming it to be 8%. So by using this information we can find out firstly the implied cost of carry and that is simply the difference between the forward price and the spot price. So it would be the value of $330 minus $300 and this will give you a $30 per ounce a year implied cost of carry. And then if we want to find out the implied storage cost, for that matter we need to plug the values the given data into this formula for storage cost and that would be simply that has been turned out to be 0.02 or 0.02 and in percentage form we can say that the storage cost which we will have to invest in gold whose spot price is $300 per ounce and the forward price is $330 per ounce the storage cost in this case would be 2% a year.