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It is now january the current interest rate is 3 the june

1. A one- year gold future contract is selling for 1141. Spot gold prices are 1200 and the one-year risk-free rate is 2%.

a. according to spot-future parity, what should be the futures price?

b. what risk-free strategy can investors use to take advantage of the futures mispricing, and what will be the profits on the strategy?

2. It is now January. The current interest rate is 3%. The June futures price for gold is 1246.30, while the December future price is 1251. Is there an arbitrage opportunity here? If so, how would you exploit it?

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Finance Basics: It is now january the current interest rate is 3 the june

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