
Ultimate access to all questions.
A commodity trader has observed that the 6-month forward price for commodity X is currently set at USD 1,000. In addition, the trader has found a 6-month zero-coupon risk-free bond on the secondary fixed-income market, which has a face value of USD 1,000. Considering these conditions, what combination of trading actions would create a synthetic long position in commodity X for a 6-month period?
A
Buy the forward contract and buy the zero-coupon bond.
B
Buy the forward contract and short the zero-coupon bond.
C
Short the forward contract and buy the zero-coupon bond.
D
Short the forward contract and short the zero-coupon bond