The Spot Rate on a Non-Dividend-Paying Stock Is $16

question 67

Multiple Choice

The spot rate on a non-dividend-paying stock is $16.70. The risk-free rate is 3.25 percent and the market rate is 11.75 percent. What is the two-month futures rate if spot-futures parity exists?

• A) $16.48
• B) $16.79
• C) $17.01
• D) $17.13
• E) $17.24

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Definitions:

Carrier

A company that provides transportation services for goods, typically via land, sea, or air.

Mode of Transportation

Refers to the various methods or forms used to move people or goods from one place to another, such as by road, rail, air, or sea.

Supply Chain

The entire network of entities, directly or indirectly interlinked and interdependent, involved in serving the same consumer or customer with products or services.

Transportation

The movement of people or goods from one location to another, using various modes such as trucks, trains, ships, or planes.