$3.$ Suppose the spot price of a bushel of wheat is $$4\mathrm{.}00,$ the annual storage costs is $$0\mathrm{.}30$ per$/$bushel$,$ the risk free rate is $3\%,$ and the costs of transporting wheat from the destination point specified on the futures contract to a local grain elevator, or vice versa, is $$0\mathrm{.}01033/$bu$.$

a$.$ Use the cost$-$of$-$carry model to determine the equilibrium price of September wheat futures contract $($expiration of T $=0\mathrm{.}25).$

b$.$ Explain the arbitrage strategy an arbitrageur would pursue if the September wheat contract is trading at $$4\mathrm{.}60/$bu$.$