Currently, The Spot Price Of Silver Is $9 Per Ounce And The One-Year Futures Price

10 marks) Currently, the spot price of silver is $9 per ounce and the one-year futures price of silver is $11. The storage costs are $0. 24 per ounce per year payable at the end of the year. Assume the simple interest rate is 10% per annum. What is the “fair” one-year futures price of silver? What is the cost of carry? (4 marks)How can you make an arbitrage profit? Show your transactions in details using a numerical example. (6 marks)

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