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Futures Price on the Contract

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A single-stock futures contract on a nondividend-paying stock with current price of $150 has a maturity of one year. If the T-bill rate is 6%, what should the futures price be? What should the futures price be if the maturity of the contract is 3 years? What if the interest rate is 8% and the maturity of the contract is 3 years?

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The expert calculates the futures price for different maturities and interest rates.

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A single-stock futures contract on a nondividend-paying stock with current price of $150 has a maturity of one year.  If the T-bill rate is 6%, what should the futures price be? What should the futures price be if the maturity of the contract is 3 years? What if the interest rate is 8% and the maturity of the contract is 3 years?

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