Problem 3. Gold quotes on Nov 1st 2019, was as fol...

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Problem 3. Gold quotes on Nov 1st 2019, was as follows: ▪ Spot price $1,471.5/oz and February futures $1,481.03/oz ▪ Risk-
free rate = 2.59% Given the above information, is here an arbitrage opportunity? If so, what is the arbitrage amount? What
would you do to lock in this arbitrage profit now and how would you achieve this arbitrage?

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Problem 3. Gold quotes on Nov 1st 2019, was as follows: ▪ Spotprice $1,471.5/oz and February futures $1,481.03/oz ▪
Risk-freerate = 2.59% Given the above information, is here an arbitrageopportunity? If so, what is the arbitrage amount?
What would you doto lock in this arbitrage profit now and how would you achieve thisarbitrage?

A:

See answer

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Q:

Problem 3. Gold quotes on Nov 1st 2019, was as follows: ▪ Spotprice $1,471.5/oz and February futures $1,481.03/oz ▪
Risk-freerate = 2.59% Given the above information, is here an arbitrageopportunity? If so, what is the arbitrage amount?
What would you doto lock in this arbitrage profit now and how would you achieve thisarbitrage?

A:

See answer
Q:

Problem 3. Gold quotes on Nov 1st 2019, was as follows: ▪ Spotprice $1,471.5/oz and February futures $1,481.03/oz ▪
Risk-freerate = 2.59% Given the above information, is here an arbitrageopportunity? If so, what is the arbitrage amount?
What would you doto lock in this arbitrage profit now and how would you achieve thisarbitrage?

A:

See answer