Answer: USD 3,191

## Explanation To calculate the price of a stock index futures contract, we use the formula: $$\text{Futures price} = S_0 \times \left[\frac{(1 + r)}{(1 + q)}\right]^T$$ Where: - $S_0$ = Current spot price = USD 3,200 - $r$ = Risk-free interest rate = 1.80% = 0.018 - $q$ = Dividend yield = 2.40% = 0.024 - $T$ = Time to maturity = 6 months = 0.5 years Substituting the values: $$\text{Futures price} = 3,200 \times \left[\frac{(1 + 0.018)}{(1 + 0.024)}\right]^{0.5}$$ $$\text{Futures price} = 3,200 \times \left[\frac{1.018}{1.024}\right]^{0.5}$$ $$\text{Futures price} = 3,200 \times \left[0.99414\right]^{0.5}$$ $$\text{Futures price} = 3,200 \times 0.99707 = 3,190.61$$ This rounds to approximately **USD 3,191**, which matches option B. **Why other options are incorrect:** - **A (USD 3,181)**: This would be the 1-year futures price calculation - **C (USD 3,209)**: This occurs when the interest rate and dividend yield are reversed in the formula - **D (USD 3,229)**: This happens when the dividend yield component is omitted from the calculation

Author: LeetQuiz .