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You own an investment asset, this asset provides no income, and it is costless to store. You can buy the asset for $2350 per ounce
You own an investment asset, this asset provides no income, and it is costless to store. You can buy the asset for $2350 per ounce and sell it for $2349 per ounce. Your cost of borrowing is 5% per year and if you invest funds you receive 4.5% per year. For what range of one-year forward prices does the trader have no arbitrage opportunities? (note: interest rates are expressed with annual compounding)
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