Question: Today is January 1. Forward prices for contracts maturing on April 1 and on October 1 are $103 and $109, respectively. The simple interest rate

Today is January 1. Forward prices for contracts maturing on April 1 and on October 1 are $103 and $109, respectively. The simple interest rate is 8 percent per year. Assuming the spot price. is $100 today, demonstrate two ways in which you can make arbitrage profits from these prices.

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The data Todays spot price S 100 The quoted forward price for a forward contract maturing on April 1 is F0 nQ 103 and that for a forward maturing on O... View full answer

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