Suppose That Trades Now Require a Transactions Cost of $3

question 3

Multiple Choice

Suppose that trades now require a transactions cost of $3 per ounce whenever spot gold is traded,a $2 per ounce one-time fee for trading forward contracts,but no charges for trading bonds.If you have to pay transactions costs,the arbitrage profit that you can make today by trading one forward contract and other securities is:

• A) 0
• B) $4.26
• C) $2.53
• D) $7.53
• E) None of these answers are correct.

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Definitions:

Preconventional

A stage in moral development characterized by an individual's obedience to rules based on external consequences rather than internalized values or principles.

Self-Control

Self-control is the ability to regulate one's emotions, thoughts, and behaviors in the face of temptations and impulses, aiming for long-term goals.

Emotional Intelligence

The ability to understand, use, and manage one's own emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges, and defuse conflict.

Self-Management

The ability to regulate one's own emotions, thoughts, and behaviors effectively in different situations.