Schweser 2012 vol2 practice exams - Dividend and equity index future price

This regards exam 1 question 114. I think the answer to this question is wrong although I’d like to double check. The topic of net benefit and net cost seems clear to me, i.e. FP = S0(1+r)^t + FV(NC) - FV(NB). So, for example, a storage cost gets added to the futures price, etc. Anyway, here is the question. If the expected growth rate in dividends for stocks increases by 75 basis points, which of the following would benefit most? An investor who: a. is short futures contacts on the equity index b. is long fugures contracts on the equity index c. has a long position in put options on the equity index The answer provided is B and the answer begins as follows, “An increase in the growth rate in dividends for stocks would increase the spot price of the equity index. As the spot price increases, the futures price for a given maturirty also increases.” After reviewing CFA book 6 pps 93-96, I think that this question is simply wrong. A dividend is a net benefit so it would decrease the futures price. In terms of a single stock, the moment the stock/company pays a dividend, the stock price decreases by exactly that amount. Unless I’m missing something related to equity indexes I just don’t see how the answer is correct. I realize that answer choices A and C are saying the same thing so it seems to me that there are too many mistakes in this question. Perhaps I’m missing something. Any thoughts?

The key words here are expected growth rate in dividends, not a single payment of dividend.

Maybe… What about the entire explanation which I believe goes counter to reading? A dividend should lower the spot price, not increase it, no?

Full, it is talking about dividend growth rate. Did you skip SS11 altogether?

You guys definitely have a point. The thing is that this question falls inside a Derivative/Futures vignette so I was grounded in that material. I totally see the point that a higher dividend growth rate will lead to a higher stock price. They switched up the material a bit; something they don’t do often. They got me but I see your point…