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?
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Public Finance
Authors: Richard W. Tresch
2nd Edition
0126990514, 978-0126990515
