The price of oil is currently 100 per barrel the contract, Finance Basics

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The price of oil is currently 100 per barrel the contract

Question: The price of oil is currently $100 per barrel. The contract size is one barrel. The forward price for delivery in one year is $130. You can borrow money at 7% per annum with annual compounding. Assume the cost of storing one barrel of oil is nothing, nor does it provide any income. Describe an arbitrage opportunity.

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Finance Basics: The price of oil is currently 100 per barrel the contract

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