The spot price of gold is $1000 per oz.The one-year risk-free rate is 2% in simple terms.There are no costs or benefits of holding gold.If the one-year forward price of gold is $103,what can you say about the market?
A) The gold spot market is in disequilibrium.
B) The demand for gold is expected to rise over the coming year.
C) You can make arbitrage profits by selling spot and buying forward.
D) You can make arbitrage profits by selling forward and buying spot.
Correct Answer:
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