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

question 51

Multiple Choice

Suppose that the current level of the Standard and Poor's Index is 950. The prospective dividend yield on S&P 500 stocks is 3 percent, and the risk-free interest rate is 5 percent. 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)1,026

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Definitions:

Shareholders' Consent

The approval or agreement by shareholders, often required for major company decisions, typically obtained through voting mechanisms.

Majority

Majority refers to more than half of a particular group or amount, often used to describe the requirement for decision-making in voting contexts.

Certificate of Authority

A document that grants a company the legal right to conduct business outside of its original state of registration.

Doing Business

This term refers to engaging in any activity or actions that constitute the operations and responsibilities of a business entity.