A One-Year Oil Futures Contract Is Selling for $74

question 44

Multiple Choice

A one-year oil futures contract is selling for $74.50. Spot oil prices are $68 and the one-year risk free rate is 3.25%. Using the one-year oil futures price, the arbitrage profit implied is ________.

• A)$6.50
• B)$5.44
• C)$4.29
• D)$3.25

---

Definitions:

Wage Garnishment

A court-ordered process that requires an employer to withhold a portion of an employee's wages and send it directly to the creditor until a debt is paid off.

Exempt Property

Property that is protected by law from being taken by creditors or in bankruptcy proceedings, typically including a primary residence, clothing, and basic household furnishings.

Designated Amount

A specific sum of money that has been allocated for a particular purpose or recipient.

Federal Consumer Credit Protection Act

Legislation that aims to ensure fair and informed use of consumer credit, including provisions on disclosure of credit terms and protecting consumers from unfair practices.