The Risk-Free Rate Is 5% and the Dividend Yield on an Index

question 14

Multiple Choice

The risk-free rate is 5% and the dividend yield on an index is 2%. Which of the following is the delta with respect to the index of a one-year futures on the index?

• A) 0.98
• B) 1.05
• C) 1.03
• D) 1.02

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Definitions:

Sensible Water Loss

Water loss from the body that is perceptible, such as through sweating and urination.

Gastroenteritis

An inflammation of the stomach and intestines, typically caused by a bacterial or viral infection, leading to symptoms like vomiting, diarrhea, and abdominal pain.

Asthma

A chronic respiratory condition characterized by episodes of airway constriction, leading to wheezing, shortness of breath, and coughing.

Venous Congestion

Venous congestion occurs when blood accumulates within the venous system, leading to increased pressure and swelling in the affected area.