A trader owns a commodity that provides no income and has no storage costs as part of a long-term investment portfolio. The trader can buy the commodity for $1,250 per ounce and sell it for $1,249 per ounce. The trader can borrow funds at 6% per year and invest funds at 5.5% per year (both interest rates are expressed with annual compounding). For what range of 1-year forward prices does the trader have no arbitrage opportunities? Assume there is no bidoffer spread for forward prices.
Bus 351 – Operations and Supply Chain Management February 14, 2016 Fall 2015 – Pfrank Test 1 - Chapters 1, 2, 4, 5 (45 points – total) TRUE/FALSE Enter T or F in space provided (25 points) 1. Efficiency means doing the right things to create the most value for the company. F 2. Project management can be defined as planning, directing, and controlling resources to meet the technical, cost, and time constraints of the project. T 3. Aproject may be defined as a series of related jobs directed toward some major output and requiring a significant period of time to perform. T 4. The triple bottom line considers evaluating the firm against social, economic, and environmental criteria. T 5. Low rates of
