The spot price of copper is $3.87 per lb, and the forward price for delivery in three months is $3.94 per lb. Suppose you can borrow and lend for three months at an interest rate of 6% (in annualized and continuously compounded terms). Assume you have no copper but can borrow it to short it if you wish. 

(a) First, suppose there are no holding costs (i.e., no storage costs, no holding benefits). Is there an arbitrage opportunity for you given these prices? If so, provide details of the cash flows. If not, explain why not. 

(b) Suppose now that the cost of storing copper for three months is $0.03 per lb, payable in advance. (This is a three-month cost, not a per-month cost.) How would your answer to (a) change?