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Suppose the price of crude oil is $95 per barrel in New York and $85 per barrel in Texas, and the ...

nakungth

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Suppose the price of crude oil is $95 per barrel in New York and $85 per barrel in Texas, and the ...

Suppose the price of crude oil is $95 per barrel in New York and $85 per barrel in Texas, and the transaction costs for trading between the two markets are $15 per barrel. What actions should you take to arbitrage this price difference?
A) Buy oil in Texas and sell oil in NY
B) Sell oil in Texas and buy oil in NY
C) Buy oil in both markets and wait for higher prices
D) Do not buy or sell oil in either market

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Microeconomics

Edition: 8^th

Author: Pindyck

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