There is a futures contract on a stock that expires in nine months. The current stock price is $93.12. If the risk-free rate is 6.25 percent, what is the futures price?
A) $96.12
B) $98.31
C) $97.45
D) $96.84
E) $97.93

Question

Quizplus · Accepted Answer

The futures price can be calculated using the formula: 
Futures Price = Spot Price * e^(risk-free rate * time to expiration)

Plugging in the values, we get:

Futures Price = $93.12 * e^(0.0625 * (9/12))
Futures Price = $97.45

Therefore, the answer is choice C.

There Is a Futures Contract on a Stock That Expires