O

il is selling at a spot price of $42.00 per barrel. Oil can be stored at a cost of $0.42 per barrel

per month. The opportunity cost of capital is 7.2% per year (or 0.6% per month). What is the

gain or loss realized by an oil refinery that floats its exposu

re and purchases oil on the spot

market in 2 months at a price of $43.00 per barrel, instead of her barrel, instead of hedging the forward contract?