On Commodity Exchange a It Is Possible to Buy and Sell

question 67

Multiple Choice

On Commodity Exchange A it is possible to buy and sell crude oil at $117 per barrel, while on Commodity Exchange B crude oil can be bought and sold at $119 per barrel. If there are transaction costs of 1% when buying or selling on either exchange, what is the net effect of buying a barrel of oil on Exchange A and selling it on Exchange B?

• A)$1.01
• B)-$0.36
• C)-$0.47
• D)$0.99

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Definitions:

Defensiveness

A psychological reaction that occurs when an individual perceives a threat or criticism, often leading to protective behavior or communication.

Sender

The individual or entity that initiates a message or communication, intending to convey information to a receiver.

Receiver

The individual or entity that obtains or is intended to obtain the content of a message from a sender, completing the communication process.

Nonverbal Communication

The transmission of information or feelings without the use of spoken words, through gestures, facial expressions, and body language.