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1 . if gold futures that expire in 3 months are trading for an F = $ 1 4 0 0 / oz , the

1 .

if gold futures that expire in

3

months are trading for an

F =

1400 /

,

the interest rate is

5 % (

annual compounding

),

and the spot price of gold is $

1350

.

If there is no cost to storing, the present value of the arbitrage profits per oz are:

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