The spot price of crude oil is $60 per barrel and the cost of storing a barrel of crude oil for one year is $5, payable at the end of the year The risk free interest is 2 per annum continuously compounded (a) The 1 year forward price for crude oil is $68 Is there an arbitrage opportunity in the ma...

a The 1year forward price for crude oil is 68 Is there an arbitrage opportunity in the market To determine if there is an arbitrage opportunity we compare the cost of storing crude oil for one year to ...

The spot price of crude oil is $60 per barrel and the cost of storing a...

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ISBN: 978-0134472089

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Authors: John C. Hull

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