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An Index has currently a value of $10,000 and pays a dividend yield of 3%....

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Finance

An Index has currently a value of $10,000 and pays a dividend yield of 3%.

What should be the price of a futures contract on the index for delivery in 1 year and what for delivery in 2 years?

Assume that the interest rates for 2 years out are flat at 9%. If the one-year futures are trading in the market for $9,500 what will you do?

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