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Cost of carry model: forward price F = S · (1 + r − y) · T (simple form) where y is dividend yield. If S = 1000, r = 8% pa, y = 3% pa, T = 0.5: F equals:
A1010
B1050
C1015
D1025
Answer & Solution
Correct answer: D. 1025
1. Identify what the question asks: this concept maps to costofcarry (§4).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (D).
_Source: ICAI BoS CA Final Paper 2, Ch 9 "Derivatives Analysis and Valuation"_
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