The Spot Price for a Non-Dividend-Paying Stock Is $24

question 11

Multiple Choice

The spot price for a non-dividend-paying stock is $24.The risk-free rate is 2.8 percent and the market rate is 10.6 percent.What is the 6-month futures price of this stock if spot-futures parity exists?

• A) $24.33
• B) $24.41
• C) $24.54
• D) $24.59
• E) $24.70

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Definitions:

Downsizing

The process of reducing the number of employees within an organization, often to cut costs or improve efficiency.

Transitional Change

A period or process of moving from one state, stage, or condition to another, often involving significant shifts in operations or strategy.

Implementing

The process of putting a decision or plan into effect; execution.

Basic Problem Solving

The process of identifying a problem, determining the cause, and finding an effective solution through a series of steps.