Suppose That the Current Level of the Standard and Poor's

Multiple Choice

Suppose that the current level of the Standard and Poor's Index is 950. The prospective dividend yield on S&P 500 stocks is 3 percent, and the risk-free interest rate is 5 percent. What is the value of a one-year futures contract on the index? (Assume all dividend payments occur at the end of the year.)

A) 969
B) 998
C) 979
D) 1,026