Futures contract enters into force

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Assume that shares in the company AB cost SEK 280 on the spot market today and that it will also be traded on a semester in 1 year. The forward price is calculated with the risk-free annual interest rate of 2.5%. Furthermore, the company plans a share dividend of SEK 21 per share in 1 year only before the futures contract enters into force. What should the futures price be for one year so that there are no opportunities for arbitrage gains?

Reference no: EM133084335

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