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A stock index currently stands at 500. The risk-free interest rate is 5% per annum (with continuous compounding) and the dividend yield on the index is 3.5% per annum. What should the futures price for a three-month contract be?

Answer :

kaympoey08

Answer:

The answer is  $502.48

Explanation:

The futures price= So e  ^(r-q)t/365

The futures price = 500e ^ (0.05-0.035)0.33= $502.48

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