Find the value of ? the cost of carry in dollars

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Suppose that there is a futures contract on a portfolio of stocks that currently are worth $100. The futures has a life of 90 days, and during that time the stocks will pay dividends of $0.75 in 30 days, $0.85 in 60 days, and $0.90 in 90 days. The simple interest rate is 12 percent.

a. Find the price of the futures contract assuming that no arbitrage opportunities are present.

b. Find the value of θ, the cost of carry in dollars.

Reference no: EM131325894

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