It is february 1 2017 the sampp 500 index is 2275 if short, Ask an Expert

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It is February 1, 2017. The S&P 500 Index is 2275. If short term interest rates = 0.5%, and the dividend yield = 2%, what should the prices of the following be?

The futures prices are actually:

Mar 2017 S&P 500 Futures price is 2250.

June 2017 S&P 500 Futures price is 2300.

a. Is there an arbitrage available for the Mar 2017 future? What will you do? How much money are you GUARANTEED to make per future (we are dealing with the e-mini futures)?

b. Is there an arbitrage available for the June 2017 future? What will you do? How much money are you GUARANTEED to make per future (dealing with e-mini futures)?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92395094

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