which one is right? There is a futures contract with 100 shares in...
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which one is right?
There is a futures contract with 100 shares in the company Foxtrot as the underlying asset and maturing in one year. No dividend is paid on the Foxtrot share and the current price is NOK 80. The annual risk-free interest rate is 2.5% and the market portfolio's risk premium is 5%. The Foxtrot stock has a beta of 1.5. According to the storage cost hypothesis and the expectation hypothesis, the price of the futures contract must today be: (a) 8,000 and 8,200 (b) 8,000 and 8,800 (c) 8,200 and 8,800 (d) 8,200 and 9,400
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