The price of gold is currently ($1),200 per ounce. The forward price for delivery in 1 year
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The price of gold is currently \($1\),200 per ounce. The forward price for delivery in 1 year is \($1\),300 per ounce. An arbitrageur can borrow money at 3% per annum. What should the arbitrageur do? Assume that the cost of storing gold is zero and that gold provides no income.
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