Which equation is used to define the futures price?
A) $\frac { F _ { 1 } ( S / € ) } { S _ { 0 } ( S / € ) }$ = $\frac { ( 1 + i _ { \$} } { \left( 1 + i _ { € } \right) }$
B) $F _ { 1 }$ = $\frac { C _ { u T ^ { - } - C _ { d T } } } { S _ { 0 } ( u - d ) }$
C) $F _ { 1 }$ = $\frac { \ln ( F / E ) + .5 \sigma ^ { 2 } T } { \sigma \sqrt { T } }$
D) $\frac { F _ { 1 } ( S / € ) } { S _ { 0 } ( S / € ) }$ = $\frac { ( 1 + i_{€} ) } { ( 1 + i _{\$} ) }$

Question

Which equation is used to define the futures price?
A) $\frac { F _ { 1 } ( S / € ) } { S _ { 0 } ( S / € ) }$ = $\frac { ( 1 + i  _ { \$} } { \left( 1 + i _ { € } \right) }$
B) $F _ { 1 }$ = $\frac { C _ { u T ^ { - } - C _ { d T } } } { S _ { 0 } ( u - d ) }$
C) $F _ { 1 }$ = $\frac { \ln ( F / E ) + .5 \sigma ^ { 2 } T } { \sigma \sqrt { T } }$
D) $\frac { F _ { 1 } ( S / € ) } { S _ { 0 } ( S / € ) }$ = $\frac { ( 1 + i_{€} ) } { ( 1 + i _{\$} ) }$

Quizplus · Accepted Answer

The futures price is defined as the price at which a futures contract can be bought or sold at a specified future date. The equation that is used to define the futures price is:$F _ { 1 } ( S / € ) = S _ { 0 } ( S / € ) \times \frac { ( 1 + i  _ { \$} } { \left( 1 + i _ { € } \right) }$where:* $F _ { 1 }$ is the futures price* $S _ { 0 }$ is the spot price* $i  _ { \$}$ is the interest rate in the domestic currency* $i _ { € }$ is the interest rate in the foreign currency

Which Equation Is Used to Define the Futures Price? A) F1(S/€)S0(S/€)\frac { F _ { 1 } ( S / € ) } { S _ { 0 } ( S / € ) }S0​(S/€)F1​(S/€)​

Which Equation Is Used to Define the Futures Price?
A) $\frac { F _ { 1 } ( S / € ) } { S _ { 0 } ( S / € ) }$