Question
Is there an arbitrage opportunity? If so, demonstrate the profit. Spot price of gold is $400. The 1 year forward price of gold is $425.
Is there an arbitrage opportunity? If so, demonstrate the profit. Spot price of gold is $400. The 1 year forward price of gold is $425. The 1 year US interest rate of 4%. If there is an opportunity, which product should be long and which should be short?
Question 1 options:
|
| A) $16.00 |
|
| B) $(16.00) |
|
| C) $9.00 |
|
| D) $(9.00) |
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The Oxford Handbook Of Computational Economics And Finance
Authors: Shu-Heng Chen, Mak Kaboudan, Ye-Rong Du
1st Edition
0199844372, 978-0199844371
