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What should the futures price for a five-month contract be

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Reference no: EM132920539

Problem 1: A stock index currently stands at 338. The risk-free interest rate is 7.4% per annum (with continuous compounding) and the dividend yield on the index is 4% per annum. What should the futures price for a 5-month contract be?

Choose the best answer.

a. $ 248.75
b. $ 417.75
c. None of the other answers provided is the best answer
d. $ 342.82
e. $ 333.25

Reference no: EM132920539

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