Asset XYZ is selling for $200 in the cash market. Asset XYZ pays the holder $16 per year in quarterly distributions ($4 each quarter), with the next distribution due in 3 months (one quarter of a year). The 3-month interest rate is 6% per year. What is the price of the future contract with a delivery date 3 months from today?

Asset XYZ is selling for $200 in the cash market. Asset XYZ pays the holder $16 per year in quarterly distributions ($4 each quarter), with the next distribution due in 3 months (one quarter of a year). The 3-month interest rate is 6% per year. What is the price of the future contract with a delivery date 3 months from today?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 12E

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