Suppose that the spot price of gold is $1700 per ounce and the three month futures price is $1720 per ounce. If the three month risk free rate of interest is 1 per cent per annum and that there are no storage costs, an arbitrageur could make a risk free profit by: borrowing money and investing in gold selling gold futures and borrow to buy spot gold buying gold futures and selling gold short in the spot market selling gold futures and investing the money received On March 1 the price of a commodity is $1,000 and the December futures price is $1,015. On November 1 the price is $980 and the December futures price is $981. A producer of the commodity entered into a December futures contracts on March 1 to hedge the sale of the commodity on November 1. It closed out its position on November 1. What is the effective price (after taking account of hedging) received by the company for the commodity? $1,016 $1,001 $981 $1.014