The spot price of silver is $$23$ per ounce.

The fair forward price for delivery of silver $6$ months from now is $$25.$ However, you notice that silver forward contracts with delivery in $6$ months are quoted at $$27$ per ounce.

What trades are required now to capture this arbitrage opportunity?

Select one:

Enter a short forward to deliver silver in $6$ months for $$27,$ then simultaneously enter a long forward contract to buy silver in $6$ months at the fair price of $$25.$

Enter a short forward to deliver silver in $6$ months for $$27,$ then borrow $$23$ and buy an ounce of silver today in the spot market for $$23.$

Enter a long forward to purchase silver in $6$ months for $$27,$ then short sell an ounce of silver today for $$23$ and invesi the proceeds in the bank.

Enter a long forward to purchase silver in $6$ months for $$27,$ then simultaneously enter a short forward contract to deliver silver in $6$ months at the fair price of $$25.$