What is the forward price today for delivery

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Today is January 1 and last year's dividend on stocks in the S&P 500 index has just been paid. The yield on a 1-year strip expressed as an EAR is 10%. The current value of the S&P 500 index is $1200. The dividend paid on the S&P 500 index is paid at the end of each year and is 4% of the index's value at the start of the year. The expected change in the value of the index over the next year is 15%. What is the forward price today for delivery of the S&P 500 index in 1 year?

Reference no: EM133000869

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