Suppose the value of the S&P $500$ stock index is currently $$4,700.$

Required:

a$.$ If the $1-$year T$-$bill rate is $5\%$ and the expected dividend yield on the S&P $500$ is $4\%,$ what should the $1-$year maturity futures price be$?$

b$.$ What if the T$-$bill rate is less than the dividend yield, for example, $1\%?$

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

If the $1-$year T$-$bill rate is $5\%$ and the expected dividend yield on the S&P $500$ is $4\%,$ what should the $1-$year maturity futures price be$?$

Futures price