Question: A forward contract for 4 months is entered into when a stock index is at 1000. If the risk free interest rate is 3% per

A forward contract for 4 months is entered into when a stock index is at 1000. If the risk free interest rate is 3% per year (with continuous compounding) and the dividend yield on the index is 2% per year, what is the futures price?

After 1 month the index price is 980, what is the value of the futures agreement assuming the risk free rate with continuous compounding is now 5% (but the original dividend rate remains 2%) and the contract price is equal to $50 times the index value?

Please answer both parts, the forward/futures price at 4 months and the value of the futures agreement after 1 month.

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