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Calculate the futures price of platinum for delivery

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Reference no: EM133068197

Question 1: The current price of platinum is $35 per ounce. The storage costs are $0.60 per ounce per year payable monthly in advance. Assuming that interest rates are 8% per annum for all maturities, calculate the futures price of platinum for delivery in 3 months.

Question 2: Suppose the futures price of platinum turned out to be $35 instead. Is there a potential for arbitrage? If so, calculate the arbitrage profit.

Reference no: EM133068197

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