A Stock Is Currently Selling for $48

question 47

Multiple Choice

A stock is currently selling for $48.50 a share and has a dividend yield of 1.8 percent. The risk-free rate is 3.5 percent. What is the 2-month futures price on this stock?

• A) $48.27
• B) $48.41
• C) $48.56
• D) $48.64
• E) $48.70

---

Definitions:

Common Stock

Common stock is a type of security that represents ownership in a corporation, with holders typically having voting rights and potential dividends.

Corporate Bonds

This is a debt of the corporation. Bondholders have loaned money to the company and are its creditors.

Monetary Policy

The process by which a central bank, currency board, or regulatory authority manages the money supply to achieve specific goals such as controlling inflation, maintaining employment, and stabilizing the currency.

Federal Reserve System

The central banking system of the United States, which oversees the nation's monetary policy, regulates banks, maintains financial stability, and provides financial services.