Use the Following Information to Answer the Question(s)below

question 21

Multiple Choice

Use the following information to answer the question(s) below.
An exchange traded fund (ETF) is a security that represents a portfolio of individual stocks.Consider an ETF for which each share represents a portfolio of two shares of Apple Inc.(APPL) ,one share of Google (GOOG) ,and ten shares of Microsoft (MSFT) .Suppose the current stock prices of each individual stock are as shown below:
-Suppose that a security with a risk-free cash flow of $1000 one year from now trades for $930 today.If there are no arbitrage opportunities,then the current risk-free rate is closest to:

• A)6.0%.
• B)6.5%.
• C)7.0%.
• D)7.5%.

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Definitions:

Product

Any item or service offered to the market for consumption, use, or acquisition.

Merchandise Inventory

Goods that a company holds for the purpose of selling to customers in the ordinary course of business.

Monthly Depreciation

The portion of a fixed asset's cost allocated as an expense over a single month, reflecting the asset's decrease in value over time.

Accounts Payable

Accounts Payable is the amount of money owed by a business to its suppliers or creditors for goods and services purchased on credit.