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

question 78

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).112
• B).250
• C).026
• D).038
• E).064