One of the Major Uses of a Stock Index Future

question 59

Multiple Choice

One of the major uses of a stock index future is the ability:

• A)to use it to hedge.
• B)to make an unlimited amount of money.
• C)to increase risk.
• D)All of the above

---

Definitions:

Compounded Annually

Interest calculated once per year on the initial principal and the accumulated interest of previous periods.

Savings Account

A savings account is a deposit account held at a financial institution that provides an interest rate to the account holder, offering a safe place to keep money while earning returns.

Interest

The charge for borrowing money or the compensation paid by the borrower to the lender for the use of borrowed funds.

Withdraw

The act of removing funds from a bank account, or the process of pulling out of an agreement or investment.