Question: it's a financial mathematics problem 1. (10 pt each) Consider a three-month forward contract on gold. Suppose that it costs $3 per ounce per quarter

it's a financial mathematics problem

1. (10 pt each) Consider a three-month forward contract on gold. Suppose that it costs $3 per ounce per quarter to store gold with payment being made at the beginning of each quarter, Assume that the spot price is $400 per ounce and the risk-free rate is 6%(4). () What is the theoretical forward price that avoids artibrage profit opportunity? (b) What are the possible arbitrage opportunities when the forward price is $4207

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