Given a Stock Index with a Value of $1,500,an Anticipated

question 85

Multiple Choice

Given a stock index with a value of $1,500,an anticipated dividend of $62 and a risk-free rate of 5.75%,what should be the value of one futures contract on the index?

• A)$1343.40
• B)$62.00
• C)$1418.44
• D)$1524.25
• E)None of the above

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Definitions:

State Law

The body of law enacted by the legislative branch of a state government or established by its judiciary.

Monopsony

A market condition where there is only one buyer for a product or service, giving them greater power over sellers.

Labor Demand Curve

A graphical representation showing the relationship between the quantity of labor demanded by employers and the wage rate.

Equilibrium Wage

The wage rate at which the quantity of labor firms wish to hire equals the quantity of labor workers wish to supply in the labor market.