Question: Suppose a certain commodity is currently priced at $900 per pound in the spot market. Suppose the 1-year futures price is $950 per pound and

Suppose a certain commodity is currently priced at $900 per pound in the spot market. Suppose the 1-year futures price is $950 per pound and you can borrow or lend funds at 10% per year. Ignore transaction and storage costs. Explain if there is an arbitrage opportunity in the case above. If yes, how much would it be on a per pound basis.

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