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Suppose that the spot price of gold is $500. The total cost of insurance and storage for gold is $30 per year, payable in advance.

Suppose that the spot price of gold is $500. The total cost of insurance and storage for gold is $30 per year, payable in advance. The rate of interest for borrowing or lending is 20%. If the forward price is $650, how much money could you make from arbitrage at expiration of the forward? Hint: Use an arbitrage table after you figure out the appropriate arbitrage portfolio.

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