2006 NOK(Nokia) SSF (Single Stock Futures) contract is trading for $17.00.
a. If you sell and hold the short position until expiration, what will I have to do on the expiration date?
b. If Intel is currently trading on the NYSE (its cash market) for $16.00, at what annual rate can you effectively (really) borrow and lend money for from the SSF market?
c. If the going annual interest rate in the Money Market is 6.25%, is the SSF market in equilibrium?
a) On the expiration date the position will be cleared as follows:
The system will automatically buy at ...
This is a solution to three short answer finance problems involving Single Stock Futures.