The 5-Month Futures Price on a Non-Dividend-Paying Stock Is $44

question 46

Multiple Choice

The 5-month futures price on a non-dividend-paying stock is $44.30.The risk-free rate is 3.0 percent and the market rate is 9.50 percent.What is the spot rate for this stock if spot-futures parity exists?

• A) $42.43
• B) $42.71
• C) $43.30
• D) $43.76
• E) $43.99

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Definitions:

Binocular Vision

The ability of both eyes to focus on an object simultaneously, allowing for depth perception and a wider field of view.

Walks Around Room

"Walks around room" refers to the action of moving on foot at a steady pace around a room, often used as a way to describe someone's physical activity in a contained space.

Holding Onto Objects

The act or behavior of physically grasping or retaining objects for a period of time, often for support, security, or comfort.

Responds by Looking

A behavior indicating attention or acknowledgement, often used to describe non-verbal communication where a person looks towards a stimulus in response.