Exhibit 21.5 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 2

Multiple Choice

Exhibit 21.5
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The S&P 500 stock index is at 1100. The annualized interest rate is 3.5% and the annualized dividend is 2%.
-Refer to Exhibit 21.5. If the futures contract was currently available for 1250, calculate the arbitrage profit.

• A)$0
• B)$133.41
• C)-$133.41
• D)$147.25
• E)-$147.25

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Definitions:

Interim Financial Report

A financial report covering a period of less than one fiscal year that provides an update on a company's financial status.

Inventory

The raw materials, work-in-process products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

LIFO Method

A method of inventory valuation where the last items added to inventory are the first ones to be used or sold.

FIFO Method

An inventory valuation method that assumes the first items purchased are the first ones sold, standing for "First-In, First-Out."