Given a Stock Index with a Value of $1,100, an Anticipated

question 2

Multiple Choice

Given a stock index with a value of $1,100, an anticipated dividend of $27, and a risk-free rate of 3%, what should be the value of one futures contract on the index?

• A) $943.40
• B) $970.00
• C) $913.40
• D) $1,106.00
• E) $1,000.00

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Definitions:

High Blood Pressure

A condition where the force of the blood against the artery walls is too high, potentially leading to health issues.

Plaque

A deposit of fatty substances and other substances on the inner wall of arteries.

Consistency

The quality of always acting or behaving in the same way, or the uniformity of a substance's texture.

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An armed conflict within a country, fought between factions or regions seeking control or autonomy.