Problem

a. A single-stock futures contract on a nondividend-paying stock with current price...

a. A single-stock futures contract on a nondividend-paying stock with current price $150 has a maturity of one year. If the T-bill rate is 3%, what should the futures price be?

b. What should the futures price be if the maturity of the contract is three years?

c. What if the interest rate is 5% and the maturity of the contract is three years?

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Solutions For Problems in Chapter 17