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Assume tFT2 = {F11 (1 + T1/T2) + T1CT2 is the equilibrium situation. Also assume that T2-T1 is one year, that T1CT2 = $3 and
Assume tFT2 = {F11 (1 + T1/T2) + T1CT2 is the equilibrium situation. Also assume that T2-T1 is one year, that T1CT2 = $3 and that T1/T2 = 10%. What statement is true about the following 2 prices FT1 = 100 & +F T2 = 133? o they are not equilibrium prices since there is an arbitrage profit of 22 o they are not equilibrium prices since there is an arbitrage profit of 20 o they are not equilibrium prices since there is an arbitrage profit of 18 o they are equilibrium prices Assume tFT2 = {F11 (1 + T1/T2) + T1CT2 is the equilibrium situation. Also assume that T2-T1 is one year, that T1CT2 = $3 and that T1/T2 = 10%. What statement is true about the following 2 prices FT1 = 100 & +F T2 = 133? o they are not equilibrium prices since there is an arbitrage profit of 22 o they are not equilibrium prices since there is an arbitrage profit of 20 o they are not equilibrium prices since there is an arbitrage profit of 18 o they are equilibrium prices
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