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Problems and Applications 2.3 Suppose that you are a wealthy investor. Although you have no connection with the oil industry, you are convinced from studying

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Problems and Applications 2.3 Suppose that you are a wealthy investor. Although you have no connection with the oil industry, you are convinced from studying the determinants of demand and supply in the oil market that the price of oil will decline sharply in the future. How might you use forward contracts to profit from your forecast? 2.4 Suppose that oil prices decline by 50%. Which counterparty to a forward contract in oil has an incentive to default on the contract? Briefly explain

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