A portfolio manager expects to purchase a portfolio of stocks in60 days. In order to hedge against a potential price increase overthe next 60 days, she decides to take a long position on a 60-dayforward contract on the S&P 500 stock index. The index iscurrently at 1150. The continuously compounded dividend yield is1.85 percent. The discrete risk-free rate is 4.35 percent.Calculate the no-arbitrage forward price on this contract.
