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Found in: Page 592

Essentials Of Investments

Book edition 9th
Author(s) Zvi Bodie, Alex Kane, Alan Marcus, Alan J. Marcus
Pages 748 pages
ISBN 9780078034695

Joan Tam, CFA, believes she has identified an arbitrage opportunity for a commodity as indicated by the information given in the following exhibit:a. Describe the transactions necessary to take advantage of this specific arbitrage opportunity.b. Calculate the arbitrage profit.

a. The strategy of reserve, cash and carry should be adopted.