If a Stock Index Futures Contract Is Overpriced, You Would

question 52

Multiple Choice

If a stock index futures contract is overpriced, you would exploit this situation by

• A) selling both the stock index futures and the stocks in the index.
• B) selling the stock index futures and simultaneously buying the stocks in the index.
• C) buying both the stock index futures and the stocks in the index.
• D) buying the stock index futures and selling the stocks in the index.
• E) None of the options are correct.

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Definitions:

Physician

A physician is a medical professional who is qualified to diagnose and treat illnesses, injuries, and other health conditions.

Elisabeth Kübler-Ross

Elisabeth Kübler-Ross was a pioneering psychiatrist best known for her work on the five stages of grief.

Acceptance

The act of recognizing or consenting to the reality of a situation or the validity of something, often without attempting to change it.

Elisabeth Kübler-Ross

A Swiss-American psychiatrist known for her pioneering work in the stages of grief, notably detailed in her book "On Death and Dying."