Given a stock index with a value of $1,200, an anticipated dividend of $45, and a risk-free rate of 6%, what should be the value of one futures contract on the index

$1,227

Explanation:

The value of the futures contract should be calculated by the formula;

= Stock Index Value * ( 1 + risk free rate ) - dividends

= 1,200 * ( 1 + 0.06) - 45

= $1,227

start by isolating the variable on one side by adding 43w^2 to both sides.   the equation will read:

25w^2+5=0

*subtract 5 from both sides*

25w^2=-5

*divide both sides by 25*

w^2=-1/5

*take the square root of both sides*

w=√(-1/5)

the square root of -1 is i.   the square root of 5 remains √5

the answer is i/√5.

hope this

answer; the correct answer should be (demonstrations); good luck