10) If the actual futures price in the market is $320 then an arbitrageur a) should go long in the spot market and short in the futures market b) should go short in the spot market and long in the futures market c) cannot make riskless arbitrage profits d) should short the futures ** futures is overpriced (sell futures, buy spot, borrow risk rate) 11) The arbitrage profit is: a) 10.44 b) 7.76 c) 5.8d ) 0.0 12) When FO>S0e(rq)T we should expect arbitrageurs to a) short the index, long the index futures, invest at r. b) long the index, short the futures, borrow at r. c) short the futures short the index borrow at r. d) long the futures long the index invest (lend) at r. 13) Which of the following describes contango? a) The futures price is below the expected future spot price b) The futures price is below today's spot price c) The futures price is a declining function of the time to maturity 10) If the actual futures price in the market is $320 then an arbitrageur a) should go long in the spot market and short in the futures market b) should go short in the spot market and long in the futures market c) cannot make riskless arbitrage profits d) should short the futures ** futures is overpriced (sell futures, buy spot, borrow risk rate) 11) The arbitrage profit is: a) 10.44 b) 7.76 c) 5.8d ) 0.0 12) When FO>S0e(rq)T we should expect arbitrageurs to a) short the index, long the index futures, invest at r. b) long the index, short the futures, borrow at r. c) short the futures short the index borrow at r. d) long the futures long the index invest (lend) at r. 13) Which of the following describes contango? a) The futures price is below the expected future spot price b) The futures price is below today's spot price c) The futures price is a declining function of the time to maturity