The currernt price of silver is$13.50 per ounce. The storage costs are$0.10 per ounce per year payable quarterly at the beginning of each quarter and the interest rate is 5%APR compounded quarterly (1.25% per quarter).

Calculate the future price of silver for delivery in nine months. Assume that silver is held for investment only and that the convenience yield of holding silver is zero.

Suppose the actual price of the futures contract traded in the market is below the price you calculated in part (a). How would you construct a risk-free trading strategy to make money? What if the actual price is higher?