What would be the spot price if a stock index futures price were $75, the risk-free rate were 10 percent, the dividend yield 3 percent, and the futures expires in three months? A. $73.70 B. $77.48
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What would be the spot price if a stock index futures price were $75, the risk-free rate were 10 percent, the dividend yield 3 percent, and the futures expires in three months?
A. $73.70
B. $77.48
C. $72.60
D. $76.32
E. none of the above
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- Given a stock index with a value of $1,400, an anticipated dividend of $62 and a risk - free rate of 5.75%, what should be the value of one futures contract on the index? a. $1343.40 b. $62.00 c. $1,418.50 d. $ 1,366.44. e. None of the above1. Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. A PO 81 41 82 Q0 100 200 200 P1 86 36 92 91 100 200 200 P2 86 36 46 02 100 200 400 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). b. What will be the divisor for the price-weighted index in year 2? c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t = 2). d. Calculate the return on a value-weighted index of the three stocks for the first period (t = 0 to t = 1).Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B C Pe 86 46 92 Rate of return Divisor Q0 100 200 200 P1 91 41 102 Rate of return Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 4.14 % 91 100 200 200 P2 91 41 51 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 2% 92 100 200 400 c. Calculate the rate of return of the price-weighted index for the second period (t=1 to t = 2).
- If the interest rate is approximately equal to the growth rate of dividends, the price of a stock will be close to Select one: a. infinity O b. It is impossible to tell based on the information above O c. 100000 O d. 0Assume that the financial markets are in equilibrium. Information on three particular shares is provided in the table below. Find the risk free rate and the expected return on the market portfolio. Asset A B C A. 6%, 18% B. 6%, 14% C. 5%, 18% D. 7%, 16% E. 5%, 14% Expected Return 7.6% 12.4% 15.6% Beta 0.2 0.8 1.218 Consider the three stocks in the following table. P represents price at time t, and o represents shares outstanding at time t Stock C splits two-for-one in the last period. A B C Pe 86 46 92 Rate of return le 100 Divisor 200 200 P₁ 91 41 102 91 100 200 200 P2 91 41 51 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (-0 to t=1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 2₂ 100 200 400 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Calculate the rate of return of the price-weighted index for the second period (t=1 to r-2) Rate of return
- 1. Consider the three stocks in the following table. Pt represents price at time 1, and Q represents shares outstanding at time. Stock C splits two-for-one in the last period. B C PO 81 41 82 00 100 200 200 PI 86 36 92 01 100 200 200 P2 86 36 46 02 100 200 400 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period ( 0 to 1=1). b. What will be the divisor for the price-weighted index in year 2? c. Calculate the rate of return of the price-weighted index for the second period (/= 1 to/= 2). d. Calculate the return on a value-weighted index of the three stocks for the first period (= 0 to 1 = 1).The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to rise to $36 or fall to $26. Assume the risk-free rate is zero. What is the risk-neutral probability of that the stock price will be $36? Choose the right answer: a. 0.3 b. 0.4 c. 0.5 d. 0.6Assume that the risk-free rate is 6.00% and the market risk premium is 6.75%. What is the expected return for the overall stock market (rM) ? (Answer as a percent with 2 decimal places. For example, 10 percent should be entered as 10.00. Do not use the % sign.)
- Consider the three stocks in the following table. P(t) represents price at time t, and Q(t) represents shares outstanding at time t. Stock C splits two-for-one in the last period. What is the rate of return for the price-weighted index that is formed using Stocks A, B, and C from time period 1 to time period 2? B C zero P(1) 95 45 100 -20.83% 20.83% None of the above Q(1) 100 200 200 P(2) 95 45 50 Q(2) 100 200 400Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. A B C Po 82 42 84 Rate of return 00 100 Divisor 200 200 P1 87 37 94 01 100 200 200 % P2 87 Required: a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t= 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.) 370 47 92 100 200 400 b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Calculate the rate of return of the price-weighted index for the second period (t=1 to t=2).Q.20 The risk manager of a large investment bank is reviewing the bank's investments in options contracts. He is particularly interested in call options contracts on shares of Hamilton Invest that the bank bought a few months ago. Hamilton Invest just unexpectedly announced that they would pay a USD 3 dividend per share in the sixth and twelfth months. The risk manager is concerned with the impact of dividends on the option's price. The risk- free rate is 5%, and the option has the following characteristics: A By how much will the price of the options change after the announcement of the dividends? Assume that N(d,) before and after the announcement of the dividend is 0.7654 and N(d₂) before and after the announcement of the dividend is 0.5489? B Strike price Expiration Underlying's Price Annual volatility The price of the option will increase by USD 3.32 USD 140 13 months USD 151 35% The price of the option will decrease by USD 3.32