|
Title: Oil is selling at a spot price of $42.00 per barrel. Oil can be stored at a cost of $0.42 per barrel ... Post by: elf_fu on Jul 6, 2017 Oil is selling at a spot price of $42.00 per barrel. Oil can be stored at a cost of $0.42 per barrel per month. The opportunity cost of capital is 7.2% per year (or 0.6% per month). What is the gain or loss realized by an oil refinery that floats its exposure and purchases oil on the spot market in 2 months at a price of $43.00 per barrel, instead of hedging with a forward contract?
A) $0.35 gain B) $0.35 loss C) $1.00 gain D) $1.00 loss Title: Re: Oil is selling at a spot price of $42.00 per barrel. Oil can be stored at a cost of $0.42 per ... Post by: phuongha2892 on Jul 6, 2017 Content hidden
|