The price of gold is currently ($ 1,000) per ounce. The forward price for delivery in 1
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The price of gold is currently \(\$ 1,000\) per ounce. The forward price for delivery in 1 year is \(\$ 1,200\). An arbitrageur can borrow money at \(10 \%\) per annum. What should the arbitrageur do? Assume that the cost of storing gold is zero and that gold provides no income.
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