a. A single-stock futures contract on a non-dividend-paying stock with current price $150 has a maturity of

Question:

a. A single-stock futures contract on a non-dividend-paying stock with current price $150 has a of 1 year. If the T-bill rate is 3%, what should the futures price be?
b. What should the futures price be if the of the contract is 3 years?
c. What if the interest rate is 6% and the of the contract is 3 years?

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...