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10. (Lecture Note 2) The current spot price of trader, can borrow money at 6% per year wit 3% per year with continuous compounding. The
10. (Lecture Note 2) The current spot price of trader, can borrow money at 6% per year wit 3% per year with continuous compounding. The cu ne current spot price of silver is $16.75 per troy ounce. Sam Chatwick, a metals w money at 6% per year with continuous compounding and lend money (risk-free) at with continuous compounding. The current six-month forward price of silver is $17.13. Does Jarl have any arbitrage opportunities? If one does exist. use an arbitrare table to demonstrate now you can make a riskless arbitrage profit. The arbitrage table should have the following column titles: Transaction", "Payoff (now)", and "Payoff (6 months)". For simplicity, you can assume there are no storage costs and no convenience yield on silver
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