Given a Stock Index with a Value of $1,500, an Anticipated

question 19

Multiple Choice

Given a stock index with a value of $1,500, an anticipated dividend of $62 and a risk-free rate of 5.75%, what should be the value of one futures contract on the index?

• A) $1,343.40
• B) $62.00
• C) $1,418.44
• D) $1,524.25

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Definitions:

Economic Activity

The production, distribution, and consumption of goods and services in an economy.

Benefits

Advantages or monetary assistance received from employment, government, or insurance.

Economic Thinking

The process of evaluating decisions based on costs, benefits, and the impact on resource allocation.

Human Action

The study of human behaviour, particularly in the context of individuals' decisions and actions in the economy.