Suppose that there are no storage costs for crude oil and the interest rate for borrowing or

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Suppose that there are no storage costs for crude oil and the interest rate for borrowing or lending is 5% per annum. How could you make money if the June and December futures contracts for a particular year trade at $80 and $86, respectively.

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Fundamentals of Futures and Options Markets

ISBN: 978-0132993340

8th edition

Authors: John C. Hull

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Question Posted: Jan 20, 2016 08:45 AM

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Suppose that there are no storage costs for crude oil and the interest rate for borrowing or

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You could go long one June oil contract and short one December contract In June you take delivery o...View the full answer

Fundamentals of Futures and Options Markets

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