A S D F G I J K L B N M return ? 7. (10 points) (a) List three types of information that can be extracted from the single stock futures market. (b) Based on the information from the single stock futures market, John cal- culates that the lending rate on BAC is 15% p.a. This high lending rate appears puzzling to John. He argues that everyone who owns any BAC should not keep the share in their portfolio. Rather, they should lend out their shares since not lending out means they will forgo a big stream of revenue - the 15% lending rate. However, at any point in time, any given BAC share must be held by someone. Those holding BAC shares seem ir- rational since, again, by keeping the BAC share in his/her portfolio, he/she gives up the lucrative lending fee. John concludes that all shareholders of BAC are irrational. Do you agree with John? Explain your reasoning.