The S&P 500 index has a dividend yield of 7.0 percent. Suppose you enter into a 11.0

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The S&P 500 index has a dividend yield of 7.0 percent. Suppose you enter into a 11.0 month forward contract to buy S&P 500 index . The current value of the index equals $1166.0 and the risk-free interest rate is 8.5 percent continuously compounded.

What is the forward price?

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Posted Date: Sep 18, 2023 02:48 AM

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The S&P 500 index has a dividend yield of 7.0 percent. Suppose you enter into a 11.0

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Expert Answer:

To calculate the forward price for the SP 500 index you can use the formula for the f... View the full answer

Introduction To Corporate Finance

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