What should the futures price for four-month contract be

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A stock index currently stands at 350. The risk-free interest rate is 8% per annum (with continuous compounding) and the dividend yield on the index is 4% per annum. What should the futures price for a four-month contract be?

Suppose one month later the stock price is 351. The dividend yield and index are the same. What is the value of the contract now?

Reference no: EM132015594

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