USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The S&P 500 stock index is at 1100. The annualized interest rate is 3.5 percent, and the annualized dividend is 2 percent.
-Refer to Exhibit 15.9. If the futures contract was currently available for 1250, calculate the arbitrage profit.
A) $0
B) $133.41
C) -$133.41
D) $147.25
E) -$147.25

Question

Quizplus · Accepted Answer

The Answer of USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The S&P 500 stock index is at 1100. The annualized interest rate is 3.5 percent, and the annualized dividend is 2 percent.
-Refer to Exhibit 15.9. If the futures contract was currently available for 1250, calculate the arbitrage profit.
A) $0
B) $133.41
C) -$133.41
D) $147.25
E) -$147.25