A one-year futures contract on a non-dividend-paying stock, Ask an Expert

Finance

A one-year futures contract on a non-dividend-paying stock is entered into when the cash price for the stock is $30 and the risk-free interest rate is 10%.

a. What is the futures price today and what is the value of this futures contract?

b. Six month later, the stock price rises to $35 and the risk-free interest rate rises to 8%. What is the futures price and what is the value of this futures contract at that time?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92858828

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