You Are Trying to Value a 3-Month Futures Contract on a Stock

question 49

Multiple Choice

You are trying to value a 3-month futures contract on a stock. The market rate of return is 11.2 percent, the risk-free rate is 3.8 percent, and the dividend yield on the stock is 2.6%. The stock is currently selling for $33 a share. What is the value of "T" as used in the formula for computing the future stock price (FT = S(1 − r) ^T) ?

• A).112
• B).250
• C).026
• D).038
• E).064

Understand the concept and applications of utility in marketing.

Appreciate the importance of maintaining cost-effective exchange relationships for mutual benefits.

Grasp key concepts and methods of marketing strategy, including market segmentation and relationship marketing.

Familiarize with the impact of marketing eras on business strategies and practices.

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Definitions:

Long-term Separations

Extended periods during which a couple remains legally married but lives apart, either by choice or circumstance, without officially divorcing.

High School Degree

A certification awarded upon completion of secondary education, typically required for entry into higher education or the workforce.

Ambivalent

Having mixed or contradictory feelings about someone or something.

Possessions

Items or properties that are owned or controlled by someone.