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To: Tony Viola who wrote (95347)	1/7/2000 11:45:00 AM
From: GVTucker	Read Replies (1) \| Respond to of 186894

Tony, RE: how is fair value calculated The fair value of the futures over the cash for the S&P 500 is the risk premium of the market. There's a mathematical proof of this; I'll spare you. Given that the risk premium is a subjective number, fair value is also a very subjective number. In fact, I argue that it is better to derive the market's current guess of the risk premium by using the futures as a guide, rather than the other way around.