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What position is equivalent to a long forward contract

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Reference no: EM131231514

Suppose that there are no storage costs for crude oil and the interest rate for borrowing or lending is 5% per annum.

a) How could you make money if the June and December futures contracts for a particular year trade at $80 and $86, respectively?

b) What position is equivalent to a long forward contract to buy an asset at K on a certain date and a put option to sell it for K on that date. Be sure to explain why.

Reference no: EM131231514

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