Question: a ) Explain with examples how arbitrage opportunities can arise if the futures price is higher than the spot price during the delivery period of

)

Explain with examples how arbitrage opportunities can arise if the futures price is higher than the spot price during the delivery period of a commodity. Additionally, explain if arbitrage opportunities can also arise when the futures price is lower than the spot price.

)

Describe how a Central Counterparty Clearing House

(

CCP

)

operates. Explain how requiring financial institutions to standardize and clear derivatives transactions through a CCP helps maintain financial stability.

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