On August 20, a stock index futures, which 21 expires on September 20, was priced at 429 70 The index was at 428 51 The dividend yield was 2 7 percent Discuss the concept of the implied 22 repo rate on an index arbitrage trade Determine the implied repo rate on this trade and explain how you would ...

The implied repo rate on an index arbitrage trade is the implicit rate of return on the tr ...

On August 20, a stock index futures, which 21. expires on September 20, was priced at 429.70.

Question:

On August 20, a stock index futures, which 21. expires on September 20, was priced at 429.70. The index was at 428.51. The yield was 2.7 percent. Discuss the concept of the implied 22. repo rate on an index arbitrage trade. Determine the implied repo rate on this trade and explain how you would evaluate it?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...