Answer:
The arbitrageur should borrow money at 4% per annum since it is cheaper than paying the forward price for delivery
Explanation:
Current price of gold=$1,400 per ounce
Forward price=$1,500
The arbitrageur can either pay the forward price or borrow $1400 and pay the interest of 4% in a year. Consider option 1 paying the forward price of 1500
Option 1
Since there are no additional costs, the total cost for buying the gold=forward price=$1,500
Option 2
If the arbitrageur borrows the 1400 to pay for the gold now, then pay the interest in 1 year;
The total cost=Amount borrowed+interest accrued in 1 year
Total cost=1400+(4%×1400)
1400+((4/100)×1400)
1400+56=$1456
Since there are no additional costs, option 2=$1456
If we compare option 1 to option 2, we notice that option 2 is slightly cheaper than option 1 by $44
(Option 1-Option 2)=(1500-1456)=$44
The arbitrageur should borrow money at 4% per annum since it is cheaper than paying the forward price for delivery
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After being recently promoted as a project manager for a new project with a new team, Suzanna must develop trust and establish the work rules by the way of interacting personally with her new team members.
<h3>Who is a project manager?</h3>
A person who is engaged or involved in planning, allocating and finishing a project for an organization, which is a part of the organizational goals, such a person is known as a project manager.
Hence, the significance of a project manager is aforementioned.
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<span>Salivary amylase in your saliva breaks down the starchy morsel as you chew. The starch breaks down into maltose that accounts for the sweet taste in your mouth.</span>
A barometer of short-term interest rates and one that is therefore considered the most volatile interest rate in the US economy is the federal funds rate.
An interest rate tells you ways excessive the price of borrowing is, or high the rewards are for saving. So, in case you're a borrower, the interest fee is the amount you are charged for borrowing cash, shown as a percent of the entire quantity of the loan.
As RBI hiked repo charge, FD quotes are anticipated to rise in 2022 and 2023. Banks and other NBFCs have already started steadily raising FD quotes after RBI made it clear that repo prices will exchange.
As interest rates circulate up, the cost of borrowing turns extra high-priced. because of this demand for decrease-yield bonds will drop, inflicting their fee to drop. As hobby prices fall, it becomes easier to borrow money, and lots of agencies will trouble new bonds to finance growth.
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