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Current value of the index

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All interest rates are annual interest rates

  • All interest rates are continuously compounded (unless specified otherwise).
  • The face value of all bonds is $100, the coupon payments are semiannual (unless specified otherwise).
  • You must keep at least 4 decimals digits while performing your calculations

Find your expected profit 11 months from now from buying an 11-month forward contract on the stock market index. The current value of the index is 5000, the contract is for $1 time the index, the index does not pay dividends, 11-month zero rate is 2% and the expected market rate of return is 8%

Reference no: EM133070442

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