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a. If the spot price of gold is $987 per troy ounce, the risk-free interest rate is 7%, and storage and insurance costs are zero,

a. If the spot price of gold is $987 per troy ounce, the risk-free interest rate is 7%, and storage and insurance costs are zero, what should be the forward price of gold for delivery in one year? (Round your answer to 2 decimal places.)

b. Calculate risk-free arbitrage profits if the forward price is $1,087. (Round your final answer to nearest whole dollar amount.)

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