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7. You are to take as given that the risk-free interest rate is 10.5% per annum with continuous compounding. Also, the dividend yield on a
7. You are to take as given that the risk-free interest rate is 10.5% per annum with continuous compounding. Also, the dividend yield on a stock index varies throughout the year. In February, May, September and October, dividends are paid at a rate of 4% per annum. In other months, dividends are paid at a rate of 3% per annum. Suppose that the value of the index on August 31 is 2,275. What is the futures price for a contract deliverable on December 31 of the same year
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