Successful arbitrage opportunity

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If gold is selling at $1,200 and a futures contract maturing in one year is trading for $1,250, which of the following is a successful arbitrage opportunity? Assume the interest rate is 2%. A. Short the gold, invest the proceeds at 2% and long the future contract now; buy back the gold next year for $1,250. B. Borrow $1,250 and long the futures contract now; buy the gold next year for $1,250. C. Borrow $1,200, buy the gold and short the futures now; sell the gold next year for $1,250. D. None of the above.

Reference no: EM131585650

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