A stock index currently stands at 350 The risk free interest rate is 4 per annum (with continuous compounding) and the dividend yield on the index is 3 per annum What should the futures price for a four month contract be ...

A stock index currently stands at 350. The risk-free interest rate is 4% per annum (with continuous

Question:

A stock index currently stands at 350. The risk-free interest rate is 4% per annum (with continuous compounding) and the yield on the index is 3% per annum. What should the futures price for a four-month contract be?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...