Discuss the pricing formula of a future contract on an investment asset that provides no income. How would you modify this formula if: The future is on a stock index that pays dividends? The future is on currencies?

Discuss the pricing formula of a future contract on an investment asset that provides no income. How would you modify this formula if: The future is on a stock index that pays dividends? The future is on currencies?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 5SCQ: Investors sometimes fear that a high-risk investment is especially likely to have low returns. Is...

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Question

Discuss the pricing formula of a future
contract on an investment asset that provides
no income. How would you modify this
formula if:
The future is on a stock index that pays
dividends?
The future is on currencies?

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