You are given the following data on gold markets. What is the level of arbitrage profits that can earned? • Current spot price of gold = $1,275 • Futures price for a 1-year contract = $1,300 • 1-year risk free interest rate = 3% • Assume that there are no carrying costs or yield on buying/selling gold.
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You are given the following data on gold markets. What is the level of arbitrage profits that can earned?
• Current spot price of gold = $1,275
• Futures price for a 1-year contract = $1,300
• 1-year risk free interest rate = 3%
• Assume that there are no carrying costs or yield on buying/selling gold.
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