The 4-Month Futures Price on a Non-Dividend-Paying Stock Is $52

question 91

Multiple Choice

The 4-month futures price on a non-dividend-paying stock is $52.00. The risk-free rate is 1.5% and the market rate is 9.0%. What is the spot rate for this stock if spot-futures parity exists?

• A)$51.43
• B)$51.74
• C)$51.89
• D)$52.23
• E)$52.99

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Definitions:

TPS

The Transaction Processing System, a specific form of information system, is tasked with collecting, saving, adjusting, and fetching transactional information pertaining to an organization.

SCM

The directive process of managing the flow of physical goods, associated information, and financial transactions from the point of supply through manufacturing stages to the wholesaler, retailer, and ultimately to the consumer is the essence of Supply Chain Management.

Interorganizational

Interorganizational pertains to the relationships or interactions between different organizations, often involving collaboration, partnerships, or competition across organizational boundaries.

Intraorganizational

Pertaining to activities, processes, or interactions that occur within a single organization.