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Practice: Suppose that: The spot price of oil is $80 per barrel; The 1-year US interest rate is 5% per annum; The storage costs of

Practice: Suppose that: The spot price of oil is $80 per barrel; The 1-year US interest rate is 5% per annum; The storage costs of oil are 2% per annum; 3. If the quoted 1-year futures price of oil is $90, is there an arbitrage opportunity? 4. If the quoted 1-year futures price of oil is $75, is there an arbitrage opportunity

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