Determine vasu can make arbitrage

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Determine whether Vasu can make arbitrage in the following cases and what exactly he would do to implement this Arbitrage and how much the arbitrage would be per troyr ounce.

A) Gold spot is trading at 1000 per troy.r ounce and 1-year gold forwards are trading at 1850, and the borrowing/lending rate is 2.00% per annum.

B) Spot Crude Oil {W111 is trading at 50 dollars per barrel. It costs 2% a year to store crude oil, paid at the end of the year, and the borrowingilending rate is 2% per annum. If the one 1year forward price is 51.20 dollars per barrel, can we make arbitrage? If so how?

C) For the same gold example in which gold spot is 1800 and the borrowing/lending rate is 2% per annum, what, if gold 1-year forwards are trading at 1810, can we make arbitrage or not, and if so how?

Reference no: EM133060661

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