Consider the "SINDY Index" Obtained by Averaging Stock Prices and a Synthetic

question 12

Multiple Choice

Consider the "SINDY index" obtained by averaging stock prices and a synthetic index "SINDY spot" that replicates its performance.SINDY's current level I is 11,000 and the synthetic index's price S is $11,000.Stocks constituting SINDY spot paid $200 in dividends last year and are expected to pay the same this year.Let the continuously compounded interest rate r be 5 percent per year.Then the six-month forward price on a newly written forward contract on SINDY is:

• A) $10,981
• B) $11,176
• C) $11,201
• D) $11,276
• E) None of these answers are correct.

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Definitions:

Financial Support

Monetary assistance given by one person or entity to another, often for specific purposes such as education, maintenance, or care.

Parties' Education

The process or act of providing the individuals or groups involved in a legal proceeding with the knowledge or information necessary to understand their rights, responsibilities, and the legal issues at hand.

Duration Of The Marriage

The period of time from the wedding date until the formal dissolution (such as divorce) of a marriage.

Divided Spouses

Married individuals who are living apart, either informally or through legal separation.