A Stock Is Currently Selling for $38

question 66

Multiple Choice

A stock is currently selling for $38.50 a share and has a dividend yield of 1.75 percent.The risk-free rate is 3.5 percent.What is the 2-month futures price on this stock?

• A) $38.27
• B) $38.41
• C) $38.56
• D) $38.61
• E) $38.70

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Definitions:

Substance

A fundamental or essential component of a matter; often refers to the material from which something is made.

Gift Causa Mortis

A gift made in contemplation of imminent death where the giver transfers personal property to another, with the gift becoming permanent if the giver dies as contemplated.

Exclusive Possession

The right of an individual or entity to use and control property to the exclusion of others.