A one-year gold futures contract is selling for $1,641. Spot gold prices are $1,700 and the one-year
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A one-year gold futures contract is selling for $1,641. Spot gold prices are $1,700 and the one-year risk-free rate is 2%. What arbitrage opportunity is available to investors? What strategy should they use, and what will be the profits on the strategy?
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The theoretical futures price S 0 1 r f T 17 00 1 0 2 1734 At 1641 the gold futures contract is ...View the full answer
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Related Book For
Essentials of Investments
ISBN: 978-0078034695
9th edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus
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