Suppose the value of the S&P/TSX 60 stock index is currently 955. 1-a. If the 1-year T-bill rate is 3% and the expected dividend yield on the S&P/TSX 60 index is 3%, what should the 1-year mat futures price be? (Omit the "$" sign in your response.) Futures price $ 1-b. What should the 1-year maturity futures price be if the T-bill rate is less than the dividend yield, for example, 1%? (Round answer to 2 decimal places. Omit the "$" sign in your response.) The T-bill rate is less than the dividend yield, then the futures price will be less than the sp. The futures price will be $ 936
Suppose the value of the S&P/TSX 60 stock index is currently 955. 1-a. If the 1-year T-bill rate is 3% and the expected dividend yield on the S&P/TSX 60 index is 3%, what should the 1-year mat futures price be? (Omit the "$" sign in your response.) Futures price $ 1-b. What should the 1-year maturity futures price be if the T-bill rate is less than the dividend yield, for example, 1%? (Round answer to 2 decimal places. Omit the "$" sign in your response.) The T-bill rate is less than the dividend yield, then the futures price will be less than the sp. The futures price will be $ 936
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Suppose the value of the S&P/TSX 60 stock index is currently 955.
1-a. If the 1-year T-bill rate is 3% and the expected dividend yield on the S&P/TSX 60 index is 3%, what should the 1-year maturity
futures price be? (Omit the "$" sign in your response.)
Futures price
$
1-b. What should the 1-year maturity futures price be if the T-bill rate is less than the dividend yield, for example, 1%? (Round your
answer to 2 decimal places. Omit the "$" sign in your response.)
The T-bill rate is less than the dividend yield, then the futures price will be less than the sp. The futures price will be $ 936.18
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