The risk-free rate is 5% and the dividend yield on the S&P/ASX 200 Index is 2%. Which of the following is correct when a futures option on the index is being valued? choose one)
A) The futures price of the S&P/ASX 200 can be treated like a stock paying a dividend yield of 5%.
B) The futures price of the S&P/ASX 200 can be treated like a stock paying a dividend yield of 2%.
C) The futures price of the S&P/ASX 200 can be treated like a stock paying a dividend yield of 3%.
D) The futures price of the S&P/ASX 200 can be treated like a non-dividend-paying stock.

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The Answer of The risk-free rate is 5% and the dividend yield on the S&P/ASX 200 Index is 2%. Which of the following is correct when a futures option on the index is being valued? choose one)
A) The futures price of the S&P/ASX 200 can be treated like a stock paying a dividend yield of 5%.
B) The futures price of the S&P/ASX 200 can be treated like a stock paying a dividend yield of 2%.
C) The futures price of the S&P/ASX 200 can be treated like a stock paying a dividend yield of 3%.
D) The futures price of the S&P/ASX 200 can be treated like a non-dividend-paying stock.

The Risk-Free Rate Is 5% and the Dividend Yield on the S&P/ASX