Based on following information.
CPO spot price = $ 980/ton
Risk-free rate = 6% /year
Annual storage cost = 4%/year ($ 39.20/ ton)
a. Is arbitrage possible? Explain
b. Explain, How do you do arbitrage?
c. Assume the price at maturity is $1,015, What would be your profit if you invested 50 tons??
