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To initiate an arbitrage trade if the futures contract is overpriced, the trader should: A. borrow at the risk-free rate, short the asset, and sell
To initiate an arbitrage trade if the futures contract is overpriced, the trader should:
A. | borrow at the risk-free rate, short the asset, and sell the futures. | |
B. | short the asset, invest at the risk-free rate, and buy the futures. | |
C. | short the future, invest at the risk-free rate, and buy the asset. | |
D. | borrow at the risk-free rate, buy the asset, and sell the futures. |
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