Futures Price Assignment

Suppose the value of the S&P 500 Stock Index is currently $2,600.

a. If the one-year T-bill rate is 4.1 % and the expected dividend yield on the S&P 500 is 3.2%, what should the one-year maturity futures price be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Futures price

b. What would the one-year maturity futures price be, if the T-bill rate is less than the dividend yield, for example, 2.2%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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