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

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