Determine the futures price for a four-month contract


A stock index currently stands at 350. The risk-free interest rate is 8% per annum (with continuous compounding) and the dividend yield on the index is 4% per annum. What should the futures price for a 4-month contract be?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Determine the futures price for a four-month contract
Reference No:- TGS0558665

Now Priced at $5 (50% Discount)

Recommended (93%)

Rated (4.5/5)