Answer: 7,733.

## Explanation Using the carry arbitrage model for futures pricing with continuous compounding: **Formula:** \[ F_0 = S_0 \times e^{(r - \delta)T} \] Where: - \( F_0 \) = Futures price - \( S_0 \) = Spot price = 7,725 - \( r \) = Risk-free rate = 3.95% = 0.0395 - \( \delta \) = Dividend yield = 3.75% = 0.0375 - \( T \) = Time to expiration = 6 months = 0.5 years **Calculation:** \[ F_0 = 7,725 \times e^{(0.0395 - 0.0375) \times 0.5} \] \[ F_0 = 7,725 \times e^{0.002 \times 0.5} \] \[ F_0 = 7,725 \times e^{0.001} \] \[ F_0 = 7,725 \times 1.001001 \] \[ F_0 = 7,732.73 \] The calculated futures price of 7,732.73 is closest to **7,733** (Option B).

Author: LeetQuiz Editorial Team