Suppose the value of the S & P 500 stocks index is currently $1,200. If the one year T-Bill rate is 3% and the expected dividend yield on the S & P 500 is 2%, what should one-year maturity futures price be? What if the T-Bill rate is less than the dividend yield, for example 1%

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Bunny GreenfelderLv2

28 Sep 2019

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Which one of these will produce an acceptable estimate of the value of the market risk premium?

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