Question: please help me with this question as soon as possible. thank you! Question 1: (10 points) Suppose the spot price of crude oil is $68/barrel.
please help me with this question as soon as possible. thank you!
Question 1: (10 points) Suppose the spot price of crude oil is $68/barrel. The 6- month forward price is $63/barrel. The storage cost is $2/barrel. The risk-free rate is 8%/year (continuous compounding). Is there an arbitrage opportunity? If yes, please identify your strategy
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
