Exhibit 21.5 Use the Information Below for the Following Problem(S)

question 48

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.Calculate the price of the futures contract now.

• A) 1108.59
• B) 1102.75
• C) 1139.79
• D) 1123.19
• E) None of the above

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Definitions:

Commission

A fee paid to an agent or employee for completing a task or making a sale, which is often a percentage of the sale's total value.

Legal Consequences

are the outcomes that follow from the application of the law, such as penalties for breaking the law or the results of legal judgments.

Liable

Responsible by law; legally obligated to compensate for harm or damage caused.

Contract

A contract recognized by law, involving at least two parties, each with obligations to the other.