Part a) - In this case we have assumed storage cost and risk free rate are in percentage
F0= (S0)e(r+U)T
F0 = Forward price
S0 = Spot price
r = risk free rate
u = storage cost
t = time period
F0= (300)e(.07+.02)1
F0 = 328.25
b) If the price of gold were greater than 328.25, which we have calculated in above part. we can make profit through arbitrage. In this case, we will buy the forward and sell the spot. The difference between them will be the profit.
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