Problem 2. (15 points) The price of gold is currently $1,500 per ounce. The forward price for

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Problem 2. (15 points) The price of gold is currently $1,500 per ounce. The forward price for delivery in one year is $1,550. An arbitrageur can borrow or lend money at 5% per annum. What should the arbitrageur do? Assume that the cost of storing gold is zero and that gold provides no income

Posted Date: Jul 11, 2024 03:05 AM

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Problem 2. (15 points) The price of gold is currently $1,500 per ounce. The forward price for

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