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Which Equation Is Used to Define the Futures Price?
A) F1($/)S0($/)=(1+i$)(1+i)\frac { F _ { 1 } ( \$ / € ) } { S _ { 0 } ( \$ / € ) } = \frac { \left( 1 + i _ { \$ } \right) } { \left( 1 + i _ { € } \right) }

Question 53

Multiple Choice

Which equation is used to define the futures price?


A) F1($/) S0($/) =(1+i$) (1+i) \frac { F _ { 1 } ( \$ / € ) } { S _ { 0 } ( \$ / € ) } = \frac { \left( 1 + i _ { \$ } \right) } { \left( 1 + i _ { € } \right) }

B) F1=CuTCdTS0(ud) F _ { 1 } = \frac { C _ { u T } - C _ { d T } } { S _ { 0 } ( u - d ) }
C) F1=ln(F/E) +.5σ2TσTF _ { 1 } = \frac { \ln ( F / E ) + .5 \sigma ^ { 2 } T } { \sigma \sqrt { T } }
D) F1($/) S0($/ϵ) =(1+i) (1+i$) \frac { F _ { 1 } ( \$ / € ) } { S _ { 0 } ( \$ / \epsilon ) } = \frac { \left( 1 + i _ { € } \right) } { \left( 1 + i _ { \$ } \right) }

E) q=F1($/) d×S0($/) u×S0($/) d×S0($/) q = \frac { F _ { 1 } ( \$ / € ) - d \times S _ { 0 } ( \$ / € ) } { u \times S _ { 0 } ( \$ / € ) - d \times S _ { 0 } ( \$ / € ) }

Correct Answer:

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