The spot price of gold, SO=390. Risk-free rate is 5%. Time to expiration is one year. You shall be able to compute a theoretical price of the gold future using those information. And if someone quotes gold futures at a price of 430 . How do we arbitrage? sell short gold futures, and sell short gold and invest the proceed to a year. sell short gold futures, and borrow money to buy gold. buy gold futures, and borrow money to buy gold. buy gold futures, and sell short gold and invest the proceed to a year