You are a crude oil dealer. You intend to buy 150,000 barrels of crude oil in December 2021. Each contract calls for delivery of 2,000 barrels of oil. Current futures price of one barrel of crude oil is $70. You believe that there are only five possible oil prices in December which are $50, $60, $70, $80 and $90. a) Calculate the total cost for each of the possible price in December.
You are a crude oil dealer. You intend to buy 150,000 barrels of crude oil in December 2021. Each contract calls for delivery of 2,000 barrels of oil. Current futures price of one barrel of crude oil is $70. You believe that there are only five possible oil prices in December which are $50, $60, $70, $80 and $90. a) Calculate the total cost for each of the possible price in December.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You are a crude oil dealer. You intend to buy 150,000 barrels of crude oil in December 2021. Each contract calls for delivery of 2,000 barrels of oil. Current futures price of one barrel of crude oil is $70. You believe that there are only five possible oil prices in December which are $50, $60, $70, $80 and $90.
a) Calculate the total cost for each of the possible price in December.
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