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OneChicago has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Each contract calls for delivery of 1,000
- OneChicago has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Each contract calls for delivery of 1,000 shares of stock in 1 year. The T-bill rate is 2% per year.
- If Brandex stock now sells at $120 per share, what should the futures price be?
- If Brandex stock has a beta of 1.2, what is the beta of an investment on one Brandex futures contract with a margin of $12,000?
- Who will be the potential participants in the Brandex futures market, and what are their motives? Name at least two types of participants with their motives; be specific.
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Essential Personal Finance A Practical Guide For Students
Authors: Lien Luu, Jonquil Lowe, Jason Butler, Tony Byrne
1st Edition
1138692956, 978-1138692954
