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You are a trader in metals. You have an opportunity to trade 5 ounces of gold and receive 1 5 ounces of palladium today. Suppose
You are a trader in metals. You have an opportunity to trade ounces of gold and receive ounces of palladium today. Suppose current market price for palladium is $ per ounce and gold can be bought and sold for a current market price of $ per ounce. Should you make this trade? Why?
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No because you are receiving only ounces and have to give ounces.
Yes, because one ounce of gold is worth $ and one ounce of palladium is worth $
These are two different metals, and so it is not possible to compare the cost and benefit of the trade.
No because oz gold $oz gold is more than oz palladium $oz palladium
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