1. Describe the forwards/futures pricing model that is appropriate for the asset you select. This could be formulas 1, 2, or 3 above or some variation of these. Hint: Since this market is new, there is no model or approach that is best. I am looking for your intuition.

2. Clearly outline the arbitrage strategy, and show the payoffs for one sample trade. State how large your trades will be, being mindful of the practical limit (i.e. you only have $10mio in capital).

3. Track the growth of your $10mio in the capital since the start of 2018 assuming you were continuously engaging in the strategy. Show your returns by month and for the entire period ending in June.

Answer rating: 100% (QA)

1 For bitcoin spot and future data the Convenience yield approach is best to earn maximum profit The Convenienceyield approach is used when the invest... View the full answer