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Suppose that you are an arbitrageur in a hedge fund. Now you find that the spot price of crude oil is US$70/bbl and the 1-year

Suppose that you are an arbitrageur in a hedge fund. Now you find that the spot price of crude oil is US$70/bbl and the 1-year forward price of crude oil is US$78/bbl.

The 1-year US dollar interest rate is 3% per annum. Each forward contract is for the delivery of 50 bbl ofcrude oil.

What is the arbitrage opportunity?

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Suppose that you are an arbitrageur in a hedge fund. Now you find that the spot price of crude oil is US$70/bbl and the 1-year forward price of crude oil is US$781. The 1-year US dollar interest rate is 3% per annum. Each forward contract is for the delivery of 50 bbl of crude oil. What is the arbitrage opportunity

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