Question 7. Today is January 1 . The price of a July forward contract on coffee (delivery date is July 1 ) is 105.20 cents per pound. The spot price of coffee is 97.92 cents per pound. You can store coffee until July 1 for 5 cents per pound (paid in advance) and you can borrow or lend money at an interest rate of 4% (annualized and continuously compounded). (a) Demonstrate how you could earn costless arbitrage profits by trading at these prices. Be sure to clearly identify the amount of your profits and when they are received. (b) What prevents you from repeatedly executing this arbitrage to earn unlimited profits? (c) Suppose it is now April 1. The July forward price is now 130.00 cents per pound, the spot price is 129.00 cents per pound and your borrowing/lending rate is still 4\%. Given these prices, should you "unwind" the arbitrage executed in part (a) or should you continue holding the position until July 1