These questions address stock futures contracts:
a. A hypothetical futures contract on a non- dividend- paying stock with current price $ 150 has a maturity of one year. If the T- bill rate is 6 percent, what is the futures price?
b. What should be the futures price if the maturity of the contract is three years?
c. What if the interest rate is 8 percent and the maturity of the contract is three years?