The price of gold is currently ($ 1,400) per ounce. The forward price for delivery in 1
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The price of gold is currently \(\$ 1,400\) per ounce. The forward price for delivery in 1 year is \(\$ 1,500\) per ounce. An arbitrageur can borrow money at \(4 \%\) 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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Given information Current price of gold 1400 per ounce Forward price for delivery in 1 year 1500 per ...View the full answer
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