C my peanut plantation has been very successful this

c) My peanut plantation has been very successful this year but I'm
worried that the peanut price will fall before I'm able to sell my stock.
d) The current global security situation is pushing the value of my gold
stocks higher and higher. I am betting this will continue well into the
future.
long
short
short
none
[4 out of 4] - Feedback
a) You are correct.
b) You are correct.
c) You are correct.
d) You are correct.

Discussion
Spot price should theoretically be lower - Arbitrage
If the spot price seems to be theoretically too high compared to the futures price it means the current spot
market is overvalued. This presents an arbitrage opportunity. When a spot market is technically overvalued
the correct arbitrage strategy is as follows:
1. Short sell the asset on the spot market.
2. Long a futures contract.
3. Deliver the asset or close out the futures contract and sell the asset on the expiry date of
the future.
Therefore, a long futures contract is required.
An important point to remember is that the overvaluation in this question is a technical discrepancy. It is not
simply a belief by the trader that the spot market is too high.
Prediction that stock market will fall - Speculation