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Technology Stocks : Dell Technologies Inc.
DELL 125.36+5.0%10:42 AM EST

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To: stock bull who wrote (116452)4/12/1999 12:12:00 AM
From: BGR  Read Replies (1) of 176387
 
Stock Bull,

You need to discount the future price by the interest rate less the dividend rate paid by the index to arrive at the index price. For example, if the interest rate is 5% and the dividend rate is 3%, and the half year out futures price is 100, then the index should be at 99 i.e. (100*(1-(0.05-0.03)/2).

IOW, over short intervals the percentage change in future's price will track the index price accurately. Of course this may change tomorrow but for the time being the downturn looks mild.

-BGR.
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