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. Suppose that: The spot price of gold is US$1,400 The 1-year forward price of gold is US$1,420 The 1-year US$ interest rate is 6%

. Suppose that:

The spot price of gold is US$1,400

The 1-year forward price of gold is US$1,420

The 1-year US$ interest rate is 6% per annum

Is there an arbitrage opportunity? Why or why not?

Calculate the profit or loss from such a strategy.

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