Given a Stock Index with a Value of $1,100, an Anticipated

question 2

Multiple Choice

Given a stock index with a value of $1,100, an anticipated dividend of $27, and a risk-free rate of 3%, what should be the value of one futures contract on the index?

• A) $943.40
• B) $970.00
• C) $913.40
• D) $1,106.00
• E) $1,000.00

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Definitions:

Java

Java is a high-level, class-based, object-oriented programming language that is designed to have as few implementation dependencies as possible, widely used for building applications and platforms.

Extends

A keyword in Java that is used to inherit the properties and methods of another class.

Reserved Word

A word that is part of the vocabulary of a programming language, having a special meaning and used for specific syntactical purposes.

Java

A popular high-level, object-oriented programming language known for its portability across platforms.