Question
Suppose that the spot price of oil is US$19, The quoted 1-year futures price of oil is us$16 The 1-year US$ interest rate is 5%
Suppose that the spot price of oil is US$19,
The quoted 1-year futures price of oil is us$16
The 1-year US$ interest rate is 5% per annum
The storage cost of oil are %2 per annum
is there an arbitrage opportunity? is yes, please explain how you can observe this opportunity.
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
10th Edition
0201785676, 9780201785678
