Suppose that the spot price of gold is $850. The total cost of insurance and storage for gold is $16 per year, payable in advance. The rate of interest for borrowing or lending is 3%. If the forward price is $880, and you are interested in arbitrage, you would: (Hint: Check answer with an arbitrage table)
a. Sell the spot commodity, lend money, and buy a forward contract
b. Borrow money, buy the spot commodity, and buy a forward contract
c. Borrow money, buy the spot commodity, and sell a forward contract
d. Sell a forward contract, lend money, and buy the spot commodity