(Solution) - Byrd Lynn owns a famous Renoir painting that has a -(2025 Original AI-Free Solution)

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Byrd Lynn owns a famous Renoir painting that has a current market value of $5,000,000. It costs Byrd $200,000 annually to insure the painting, payable at the start of the year. Byrd is able to loan the painting to a local art gallery for $300,000 per year, paid at the end of the year. Byrd is considering selling the painting under a futures contract arrangement that calls for delivery one year from today. If the one-year riskfree rate is 5%, what is the fair value of the futures contract?