If Spot-Futures Parity Exists for an Index Future Then the Future

question 83

Multiple Choice

If spot-futures parity exists for an index future then the future price must equal the:

• A)spot price.
• B)present value of the spot price at the risk-free rate.
• C)present value of the spot price at the market rate.
• D)future value of the spot price at the risk-free rate.
• E)future value of the spot price at the market rate.

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Definitions:

Real Events

Actual occurrences or happenings in the physical world, as opposed to imagined or theoretical situations.

Curve Of Forgetting

A graph showing a distinct pattern in which forgetting is very fast within the first hour after learning a list and then tapers off gradually.

Ebbinghaus

A psychologist known for his research on memory and the forgetting curve, the decline of memory retention over time.

Retrieval Period

The timeframe during which a memory or piece of information is recalled or retrieved from the storage after learning.