Question: All else equal (price, risk-free, time to maturity, etc.) , what is the effect on the futures price of an asset that pays some positive

All else equal (price, risk-free, time to maturity, etc.), what is the effect on the futures price of an asset that pays some positive dividend when compared to the futures price of an asset that pays no dividend?

This depends on the size of the dividend compared to the price of the asset.

The futures price of the dividend paying asset will be higher.

The futures price of the dividend paying asset will be lower.

The dividend yield has no effect on the futures price.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!