Given a Stock Index with a Value of $1,125, an Anticipated

question 11

Multiple Choice

Given a stock index with a value of $1,125, an anticipated dividend of $33, and a risk-free rate of 4%, what should be the value of one futures contract on the index?

• A) $1137.00
• B) $1070.00
• C) $993.40
• D) $995.09
• E) $1000.00

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Definitions:

Ulna

One of the two long bones in the forearm, extending from the elbow to the smallest finger, and when in anatomical position, is located on the inner aspect of the forearm.

Femur

The longest and strongest bone in the human body, extending from the hip to the knee.

Fibula

A long, thin bone of the lower leg, situated lateral to the tibia.

Tarsals

A group of seven articulating bones found in the rear part of the foot, making up the ankle and the arch, playing a key role in movement and weight bearing.