Delivery of Stock Index Futures

question 21

Multiple Choice

Delivery of stock index futures

• A) is never made.
• B) is made by a cash settlement based on the index value.
• C) requires delivery of 1 share of each stock in the index.
• D) is made by delivering 100 shares of each stock in the index.
• E) is made by delivering a value-weighted basket of stocks.

Calculate and compare future values of investments with different interest compounding frequencies.

Define and calculate the present value (PV) of future cash flows.

Describe the impact of the discount rate on present value calculations.

Understand the definitions of key financial concepts including present value, future value, discount rate, compounding, compound interest, and simple interest.

---

Definitions:

Contingency Table

A tabular method for displaying the frequencies of different outcomes in a sample, allowing for analysis of the association between categorical variables.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists between certain characteristics of a population or dataset.

Contingency Table

A tabular arrangement of data that displays the frequency distribution of variables to study the relationship between them.

Expected Values

The expected value of a variable is determined by the total of all its potential outcomes, each weighted by its chance of happening.