Problem 1b, they show how without access to the lending market, a cash and carry arbitrage strategy ends up loosing money after paying for borrowing costs at the Risk Free Rate. I understand this, but what is confusing me is how they calcualte problem 1c. The prices for gold they are using at time 0 is different than the prices used at time 0 for problem 1b. It looks like they have discounted the 300/spot price back by the lease rate to arrive at 295.5336. Can someone explain why this is?
1b: no lease received --> you have to pay the full price of 300 1c: supposed that you will lease it out immediately and get lease right away --> lease = 300* (1- exp (-1.5%)) = 4.4664 --> to be deducted from the paid price.