The spot price of Timber is US$300. The 1-year forward price of gold is US$340. The 1-year US$ interest rate is 5% per annum. Is there an arbitrage opportunity?
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The spot price of Timber is US$300. The 1-year forward price of gold is US$340. The 1-year US$ interest rate is 5% per annum. Is there an arbitrage opportunity?
F = S (1+r)T
Spot price (S)
Forward price (F)
Contract deliverable in years (T)
Risk-free rate of interest (r)
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