You Purchased Six DJIA Index Futures at a Price of 20,342

question 22

Multiple Choice

You purchased six DJIA index futures at a price of 20,342. The contract size is $10 times the level of the index. The futures are maturing today when the price is 20,129. What is the amount of your profit or loss?

• A)−$12,780
• B)−$1,278
• C)−$12,720
• D)$1,278
• E)$12,780

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Definitions:

Heuristics

Simple, efficient rules, either hard-coded by evolutionary processes or learned, which help in making decisions, forming judgments, or solving problems.

Error-Free Decisions

Decisions made without mistakes, achieved through careful analysis, planning, and consideration of all relevant information.

Recognition Heuristics

A cognitive shortcut where a decision is made based on the recognition or familiarity of an option rather than on a detailed comparison or analysis.

Hardwired Heuristics

Innate or instinctual mental shortcuts that humans use to make decisions or solve problems efficiently.