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The Price of Coal Is Currently $80 Per Tonne and the Interest

Question 67

Multiple Choice

The price of coal is currently $80 per tonne and the interest rate is 10 per cent per year. If next year's expected price is $86 per tonne, a firm that owns 1,000 tonnes of coal


A) will sell none of its coal now but might sell it all next year.
B) will sell half of the coal today and half of it next year.
C) might or might not sell the coal today, depending on the price the firm paid for the coal.
D) will sell none of its coal now but will sell it all next year regardless of the price next year.
E) will sell all its coal now.

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