Determination of Future Contract Price (100% Correct) - 22150

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Consider the three-month futures on stock BBM. Currently, the price of stock BBM is $100. The stock is expected to pay a dividend of $2.00 in two months. Assume that the simple interest rate is 6% per year. Determine the price of the futures assuming no arbitrage opportunites are present.

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Determination of Future Contract Price Solution.docx
Determination o...