A Hypothetical Futures Contract on a Non-Dividend-Paying Stock with Current

question 52

Multiple Choice

A hypothetical futures contract on a non-dividend-paying stock with current spot price of $100 has a maturity of four years. If the T-bond rate is 7% what should the futures price be?

• A)$76.29
• B)$93.46
• C)$107.00
• D)$131.08

---

Definitions:

Descending Colon

A part of the large intestine that transports feces downward from the transverse colon to the sigmoid colon on the left side of the abdomen.

Rectum

The final section of the large intestine, terminating at the anus, where feces are stored before being expelled.

Nasopharynx

The upper part of the throat that lies behind the nose and above the level of the soft palate.

Nasal Cavity

The Nasal Cavity is the air passage starting at the nostril and extending to the back of the throat that functions in breathing, smelling, and filtering particulates from inhaled air.