The risk-free interest rate is 5% per year and the dividend yield on the SP500 index is

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The risk-free interest rate is 5% per year and the dividend yield on the SP500 index is 2% per year. This index is currently 1000.00 and the futures price for the contract maturing in 4 months is 1012.

Assuming perfect capital markets, what arbitrage, if any, does this create?

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Principles of Corporate Finance

ISBN: 978-0072869460

7th edition

Authors: Richard A. Brealey, Stewart C. Myers

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Posted Date: Jun 15, 2023 11:47 PM

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The risk-free interest rate is 5% per year and the dividend yield on the SP500 index is

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To assess the arbitrage opportunities created by the given information we need to compare the spot p... View the full answer

Principles of Corporate Finance

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