The value of an index on shares is currently at 350. The risk-free interest rate is 8% per year (continuous compound) and the dividend rate of the index is 4% per year (continuous compound).

Calculate the price of the future for a four-month contract. Reply

The value of a futures contract at the moment signed is zero, but at a later time its value can be positive or negative. The value depends on the exercise price and the underlying price according to the expression: f = S Ke rT (for assets that do not pay income)

What will be the expression for assets that pay a known dividend rate? f = Answer

If in the previous year the exercise price is K = 450, what is the initial value of the contract? Reply