Answer: USD 755.65

The price of the 6-month futures contract can be determined using the formula for the forward price on a financial asset, which is given by: \[ Fo,T = Soe^{(r-q)T} \] where: - \( So \) is the spot price of the asset. - \( r \) is the continuously compounded risk-free interest rate. - \( q \) is the continuous dividend yield on the asset. - \( T \) is the time until the delivery date in years. Given the information from the file: - The spot price of the stock index (\( So \)) is USD 750. - The continuously compounded risk-free rate (\( r \)) is 3.5% per year. - The continuously compounded dividend yield (\( q \)) is 2.0% per year. - The time until delivery (\( T \)) is 0.5 years (6 months). Plugging these values into the formula, we get: \[ Fo = 750e^{(0.035 - 0.02) \times 0.5} \] \[ Fo = 750e^{0.015 \times 0.5} \] \[ Fo = 750e^{0.0075} \] \[ Fo \approx 750 \times 1.0076 \] \[ Fo \approx 755.65 \] Therefore, the correct price of the 6-month futures contract is USD 755.65, which corresponds to option B. This calculation is based on the no-arbitrage principle, ensuring that the futures price reflects the cost of carrying the asset until the delivery date, adjusted for dividends and the risk-free rate.

Author: LeetQuiz Editorial Team