Suppose That the Current Level of the Standard and Poor's

question 64

Multiple Choice

Suppose that the current level of the Standard and Poor's Index is 950.The prospective dividend yield on S&P500 stocks is 3%,and the risk-free interest rate is 5%.What is the value of a one-year futures contract on the index? (Assume all dividend payments occur at the end of the year.)

• A)969
• B)998
• C)979
• D)1026

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Definitions:

Confederates

Individuals who secretly work with researchers to act as part of an experiment's social setting but whose behavior is rehearsed or controlled to manipulate the social context.

In Vivo

In life or in a real-life situation, often used to describe experiments conducted in natural conditions as opposed to a laboratory.

Flooding

Flooding is a behavioral therapy technique for treating phobias and anxiety disorders by exposing the patient to fear-inducing stimuli in a controlled environment to the point of extinguishing the fear response.

In Vivo

A term used in research to refer to experiments or studies conducted in the living organism, as opposed to in vitro or in a laboratory setting.