Answered

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A short futures contract on a non-dividend paying stock was entered some time ago. It now has 6 months to maturity. The risk-free rate of interest is 10% per year. The stock is currently trading at $25/share and the delivery price is $24/share. How much is your position worth today (ignore marking to market costs)

Sagot :

Tundexi

Answer:

$26.225

Explanation:

Spot rate amount = $25

Period = 0

FV Period = 6 month. FVF at 5%, 6 month = 1.049

Position worth today = Spot rate amount * FVF

Position worth today = $25 * 1.049

Position worth today = $26.225

So, my position worth today is $26.225.

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