# Fight Finance

#### CoursesTagsRandomAllRecentScores

 Scores keithphw $6,001.61 an4_bolt$4,106.43 Visitor $380.00 Visitor$280.00 Visitor $240.00 SGDMGSM$183.46 Visitor $157.00 Visitor$150.00 Visitor $129.43 Visitor$129.43 Visitor $106.43 Visitor$100.00 Visitor $88.61 Soo$75.33 Visitor $62.09 Visitor$60.00 Visitor $60.00 Visitor$60.00 Visitor $46.09 Visitor$43.81

An equity index stands at 100 points and the one year equity futures price is 102.

The equity index is expected to have a dividend yield of 4% pa. Assume that investors are risk-neutral so their total required return on the shares is the same as the risk free Treasury bond yield which is 10% pa. Both are given as discrete effective annual rates.

Assuming that the equity index is fairly priced, an arbitrageur would recognise that the equity futures are:

An equity index stands at 100 points and the one year equity futures price is 107.

The equity index is expected to have a dividend yield of 3% pa. Assume that investors are risk-neutral so their total required return on the shares is the same as the risk free Treasury bond yield which is 10% pa. Both are given as discrete effective annual rates.

Assuming that the equity index is fairly priced, an arbitrageur would recognise that the equity futures are:

Question 860  idiom, hedging, speculation, arbitrage, market making, insider trading, no explanation

Which class of derivatives market trader is NOT principally focused on ‘buying low and selling high’?