1. The current price of gold is $1,350 per ounce. The forward price for delivery in one year is $1,400. An arbitrageur can borrow money at 4% per annum.

How can an arbitrageur take advantage of this opportunity?

2. An investor owns 4000 shares with the value of $30 per share.

What options position can help this investor against a decrease in the value of the shares in the next six months?

3. When a new trade is completed what are the possible effects on the open interest?

Can the volume of trading in a day be greater than the open interest?

What happens to open interest during the month preceding the delivery? Why so?