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An Investor Enters into a Forward Contract to Buy 5,000 $15,000- \$ 15,000

Question 1

Multiple Choice

An investor enters into a forward contract to buy 5,000 barrels of oil at $80 a barrel in three months.Two months later,suppose that the one-month forward price of oil is $83 a barrel,and the one-month interest rate is 0%.The value of the contract the investor holds after two months is


A) $15,000- \$ 15,000
B) + $15,000
C) +$400,000
D) +$415,000

Correct Answer:

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