Answer and explain the followinga stock has a current price, Ask an Expert

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Answer and explain the following:

A stock has a current price of $125/share and the T-Bill rate is 1%.

A. If the stock does not pay a dividend, what should be the price of a one-year futures contract on the stock?

B. If the stock does not pay a dividend, what shoule be the price of a three-year futures contract on the stock?

C. If the stock pays an annua dividend of $5, what should the one-year futures price be?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92747529

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