The price of gold is currently 1000 per ounce the forward, Financial Management

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The price of gold is currently 1000 per ounce the forward

The price of gold is currently $1,000 per ounce. The forward price for delivery in 1 year is $1,200. An arbitrageur can borrow money at 10% per annum. What should the arbitrageur do? Assume that the cost of storing gold is zero and that gold provides no income.

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Financial Management: The price of gold is currently 1000 per ounce the forward

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