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What is the fair price for a futures contract

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Reference no: EM133223677

Question: The S&P500 market index of US stocks is currently 5000 points. The dividend yield on the S&P500 index is 4% per annum and the riskfree rate of interest in the United States is 1% per annum.

What is the fair price (F) for a futures contract based on the S&P500 which expires in 3 months' time?

Reference no: EM133223677

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