Question

In equity index futures, Cost of Carry formula is:

• A. Storage Cost - Dividends
• B. Interest Cost + Storage Cost
• C. Financing Cost - Dividends
• D. Dividend - Interest Cost
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Hint:

For equity index derivatives, the storage cost is zero. The cost of carry is simply the financing cost of buying the index shares minus any dividends those shares pay.

Answer 1

The Correct Option is C