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The current spot price of gold is $1280 per ounce. The forward price for 1 year delivery is $1400. Suppose an investor can borrow at

The current spot price of gold is $1280 per ounce. The forward price for 1 year delivery is $1400. Suppose an investor can borrow at 3% per year (simple interest). How can the investor make a riskless profit (assuming there is no cost or benefit to storing gold).

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To make a riskless profit in this scenario the investor can use a strategy called arbitrage Arbitrag... blur-text-image

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