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

question 31

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 percent.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 (F_T = S(1 - r) ^T) ?

• A) 0.112
• B) 0.250
• C) 0.026
• D) 0.038
• E) 0.064

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Definitions:

Reinforcement Theory

A concept in psychology that suggests behavior can be shaped by rewarding or punishing outcomes.

Intrinsic Motivation

The internal drive to perform an activity for its own sake and for the personal rewards it brings.

Desired Behaviours

Specific actions or responses that an organization aims to encourage among its members to achieve its goals.

Procedural Justice

The fairness of the processes that are used to make decisions within organizations, which can affect perceptions of fairness and employee satisfaction.