SHOW ALL STEPS TO DESCRIBE THE ARBITRAGE..

Lithium is a metal which plays an important role because of its use in electric cars. Recently CME Group started trading futures contracts on lithium hydroxide 1 Assume that the spot price of lithium is $29.50 per kilogram (as of 20 Jan-2023). Suppose that the market quotes a forward contract on lithium with delivery in 1 year at $31.25. The risk-free interest rate is r=5.0%. Is there an arbitrage opportunity? If yes, describe the steps required to realize the arbitrage. Neglect the storage cost