The current spot price (on Feb 14, 2022) for silver is $22.10 per ounce and the storage cost for silver is 36 per ounce. The industry standard requires silver storage costs to be paid in advance. There exists a Mini-Silver contract which is traded on the ICE.

(a) (3 points) Calculate the fair-value price for the Jul22 Mini-Silver contract.

(b) (6 points) Suppose the current futures price for the contract on the ICE is $22.66. Devise an arbitrage strategy using one futures contract! What is your arbitrage profit?

(c) (3 points) What would be your answer to part a) if the industry standard were to pay silver storage costs in advance on a semi-monthly basis?