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A single-stock futures contract on a non-dividend-paying stock with current price $250 has a maturity of 1 year. If the T-bill rate is 4%, what should the futures price be

User Fingerpich
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1 Answer

1 vote

Answer: $260

Step-by-step explanation:

From the question, we are informed that a single-stock futures contract on a non-dividend-paying stock with current price $250 has a maturity of 1 year and that the T-bill rate is 4%.

The futures price would be:

= Current price (1 + 4%)^1

= $250 (1 + 0.04)

= $250 × 1.04

= $260

User Yi
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