Synthetic position based on G/L

CFA Level III Derivatives
#1

Can someone refresh my memory please…how does F0 = S0[(1+rf)/(1+div yield)]^T?

Is it because the dividends are not paid in to the buyer of a futures contract so the futures price must be discounted by the dividend yield?

#2

Yes.

#3

Ok thanks

#4

You’re welcome.

#5

OMG I got lost! what’s this function for?