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

question 20

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%. The one-year oil futures price should be equal to ________.

• A)$68.00
• B)$70.21
• C)$71.25
• D)$74.88

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Definitions:

Incorrect Entry

An error or mistake made in recording transactions in the accounting records.

Correcting Entry

A journal entry made to rectify an error in the accounting records, ensuring the accuracy of financial statements.

Equipment

Tangible assets used in operations, not intended for sale, that have a useful life of more than one year.

Supplies

Consumable items or materials used in the day-to-day operations of a business.