1. Identify the main component sub-accounts of the current account in the balance of payments (BoP). Give and explain one debit and one credit example transaction for each component sub-account for the United States.
2. Given a continuously compounded risk-free rate of 3% annually, at what lease rate will forward prices equal the current commodity price? (Recall the copper example in Section 6.3.) If the lease rate were 3.5%, would there be contango or backwardation?