The 9-Month Futures Price on a Non-Dividend-Paying Stock Is $38

question 74

Multiple Choice

The 9-month futures price on a non-dividend-paying stock is $38.20. The risk-free rate is 2.75 percent and the market rate is 9.60 percent. What is the spot rate for this stock if spot-futures parity exists?

• A) $37.43
• B) $37.84
• C) $38.30
• D) $38.70
• E) $38.99

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Definitions:

Senile Plaques

Protein deposits found in the brains of people with Alzheimer's disease, characterized by clusters of beta-amyloid protein that disrupt cell function.

Neurofibrillary Tangles

Twisted protein fibers found within the brain's cells that are one of the hallmark physical characteristics of Alzheimer's disease.

Beta-Amyloid Protein

A small molecule that forms sphere-shaped deposits called senile plaques, linked to aging and to Alzheimer’s disease.

Neural Plaques

Deposits of beta-amyloid protein that form in the spaces between nerve cells in the brain, associated with Alzheimer's disease.