What Is the Expected Growth Rate of an Index Futures

question 14

Multiple Choice

What is the expected growth rate of an index futures price in the risk-neutral world?

• A) The excess of the risk-free rate over the dividend yield
• B) The risk-free rate
• C) The dividend yield on the index
• D) Zero

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Definitions:

Proof 2

An alternative term generally meaning evidence or argument establishing a fact or the truth of a statement.

Demonstrations

organized activities by a group of people to show their protest, or support for, or against a cause.

Validity

The property of an argument in which the truth of the premises logically guarantees the truth of the conclusion.

Hypothetical Syllogism (HS)

A logical argument consisting of two conditional statements and a conclusion that is logically inferred from them.