USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 70

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The S&P 500 stock index is at 1100. The annualized interest rate is 3.5 percent, and the annualized dividend is 2 percent.
-Refer to Exhibit 15.9. If the futures contract was currently available for 1250, calculate the arbitrage profit.

• A) $0
• B) $133.41
• C) -$133.41
• D) $147.25
• E) -$147.25

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Definitions:

Maslow's Hierarchy

A theory of psychological health predicated on fulfilling innate human needs in a priority, culminating in self-actualization.

Will Meaning

Denotes the mental faculty by which one deliberately chooses or decides upon a course of action.

Drive Succeed

The inner motivation or desire to achieve success in one's endeavors or pursuits.

Defer Gratification

The process of resisting the temptation of an immediate reward in preference for a later reward.