If the Stock Market Index Is at a Level of 1,120

question 2

Multiple Choice

If the stock market index is at a level of 1,120 and the one-year forward on the index is 1,210, what is the implied repo rate in continuously-compounded terms (assuming zero dividends on the index) ?

• A) 5.72%
• B) 6.52%
• C) 7.72%
• D) 8.62%

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