(d) An equity index is currently 1,200. A fourteen month zero coupon bond costs 0.965 and a fourteen month forward on the index costs 1,240. Calculate the value of the fourteen month continuously compounded dividend yield on the index. Explain the formulae you use. [6 marks]

(d) An equity index is currently 1,200. A fourteen month zero coupon bond costs 0.965 and a fourteen month forward on the index costs 1,240. Calculate the value of the fourteen month continuously compounded dividend yield on the index. Explain the formulae you use. [6 marks]