Price of a prepaid forward contract


The S&P 500 Index is priced at $950.46. The annualized dividend yield on the index is 1.40%. What is the price of a 6-month prepaid forward contract on the S & P 500 Index?

(a) $943.83

(b) $950.00

(c) $964.26

(d) $984.21

(e) None of the above.

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Finance Basics: Price of a prepaid forward contract
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