Given a Stock Index with a Value of $1,000,an Anticipated

question 7

Multiple Choice

Given a stock index with a value of $1,000,an anticipated dividend of $30 and a risk-free rate of 6%,what should be the value of one futures contract on the index?

• A) $943.40
• B) $970.00
• C) $913.40
• D) $915.09
• E) $1,000.00

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Definitions:

Psychokinesis

Psychokinesis refers to the supposed ability to move or manipulate objects with the mind, without physical intervention.

Precognition

The alleged ability or phenomenon of knowing or perceiving events before they happen or occur.

Clairvoyance

Clairvoyance is the purported psychic ability to gain information about an object, person, location, or physical event through extrasensory means, beyond the known human senses.

Perceptual Set

A mental predisposition to perceive one thing and not another, influenced by expectations, culture, and other psychological factors.