a) The spot price for gold is $650. The risk-free interest rate is 5%. What is the

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a) The spot price for gold is $650. The risk-free interest rate is 5%. What is the futures price for gold for a six-month contract?
b) The six-month futures price in the market is $682.50. Is there an arbitrage opportunity here? Why? If so how would you exploit it? Explain.
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Financial Reporting And Analysis

ISBN: 9781260247848

8th Edition

Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer

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