The spot price for a non-dividend-paying stock is $24. The risk-free rate is 3.2 percent and the market rate is 11.8 percent. What is the 6-month futures price of this stock if spot-futures parity exists?
A) $24.38
B) $24.41
C) $24.54
D) $24.59
E) $24.70

Question

Quizplus · Accepted Answer

The futures price is calculated using the formula: Futures Price = Spot Price * e^(risk-free rate * time). Here, it is $24 * e^(0.032 * 0.5) = $24.38.

The Spot Price for a Non-Dividend-Paying Stock Is $24