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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%

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;

1) If the quoted 1-year futures price of oil is $90, is there an arbitrage opportunity?

2) If the quoted 1-year futures price of oil is $75, is there an arbitrage opportunity?

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