A Riskless Stock Index Arbitrage Profit Is Possible If the Following

question 41

True/False

A riskless stock index arbitrage profit is possible if the following condition holds: F_0,T = S₀(1 + r_f - d)^T, where spot price now is S₀, value now of a futures contract expiring at time T is (F_0,T), r_f is the risk free rate, and d is the dividend.

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Definitions:

Globalization

The process by which businesses, technologies, and cultures begin to operate on a global scale, leading to increased interconnectedness and interdependency among nations.

Glocalization

A process combining globalization with local considerations, adapting global practices to fit local needs, cultures, and practices.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to an increase in interconnectedness and interdependence among the world's markets and businesses.

Local Differences

Variations in cultural, social, economic, and environmental characteristics that are unique to specific geographic areas or communities.