QUESTION 4 [9 MARKS] A. The current price of gold is $300 per ounce. Carrying costs in total are 0.5% (not including interest) of the gold value payable in 6 months time. If the interest rate is 8%, is there an arbitrage opportunity if the gold futures price for delivery in six months is $310 per ounce? [3 marks] B. If an arbitrage opportunity exists, explain how you would conduct it and calculate the arbitrage profit. [2 marks] C. Why is it not possible in reality to perfectly hedge a portfolio using Options andlor futures Instruments? [2 marks] D. Explain the shortcomings of LTCM's nancial strategy that led to its eventual downfall. [2 marks]