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A trader owns a commodity that provides no income and has no storage costs as par of a long-term investment portfolio. The trader can buy

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A trader owns a commodity that provides no income and has no storage costs as par of a long-term investment portfolio. The trader can buy the commodity for $25 per ounce and sell it for $24.80 per ounce. The trader can borrow funds at 6% per year and invest funds at 5.5% per year. Both interest rates are expressed with continuous compounding. Assuming there is no bid-offer spread for forward prices, under which of the following 6-month forward price does the trader have no arbitrage opportunity? $25.00 $25.60 $25.95 $26.30

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