A hypothetical futures contract on a nondividend-paying stock with a current spot price of $100 has a maturity of 1 year. If the T-bill rate is 5%, what should the futures price be?
A) $95.24
B) $100
C) $105
D) $107

Name: A hypothetical futures contract on a nondividend-paying stock with a current spot price of $100 has a maturity of 1 year. If the T-bill rate is 5%, what should the futures price be? A) $95.24 B) $100 C) $105 D) $107
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Question

Quizplus · Accepted Answer

F₀ = S₀(1 + r)^T = $100(1.05)¹ = $105

A Hypothetical Futures Contract on a Nondividend-Paying Stock with a Current