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Your friend David has just bought a futures contract on a stock index, and the contract specifies one year to expiration. The current share price
Your friend David has just bought a futures contract on a stock index, and the contract specifies one year to expiration. The current share price is $80, and the annually compounded interest rate is 10%. The stock will pay quarterly dividends of $2 during the next year, with dividends payments on the following dates:
- January 25
- April 25
- July 25
- October 25
Assume that this is a non-leap year.
- What is the futures price on this contract on January 3?
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