I need a help for the following question:
A stock index is constructed by including only two stocks in the index. One of the stocks (Stock $1$) currently sells for $250$ dollar and the other stock (Stock $2$) sells for $187.5$. The current value of the index is $437.5$. Stock $1$ is expected to pay a dividend of $7.5$ in one months and Stock $2$ is expected to pay a dividend of $2.5$ in two months. A futures contract written on this index expires in three months. Currently, the finance cost of carry in the market is $0.75%$ per month. Calculate the theoretically fair value of this futures contract by assuming monthly compounding.
Here what i have done so far: $f_0(T)=437.5(1.0075)^{3/12}-7.5(1.0075)^{2/12}-2.5(1.0075)^{1/12}$ I think this is not true. Where do i make mistake? Should i use stock $1$ and stock $2$?