
Ultimate access to all questions.
A commodity trader observes that the 6-month forward price of commodity X is USD 1,000. The trader also notes that there is a 6-month zero-coupon risk-free bond with face value USD 1,000 that trades in the secondary fixed-income market. Which of the following strategies creates a synthetic long position in commodity X for a period of 6 months?
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.