An investor plans to enter into a 250day forward contract on the S&P 500 index. The current value of the index is 2,357. With a continuously compounded riskfree rate of 8% and a continuously compounded dividend yield of 3%, what will the noarbitrage price of the forward contract be (assuming a 365day year)?

Answer rating: 100% (QA)

To calculate the noarbitrage price of the forward contract on the SP 500 index we need to consider t... View the full answer