Which One of the Following Terms Is Defined as the Strategy

question 74

Multiple Choice

Which one of the following terms is defined as the strategy of monitoring the futures price on a stock index in relation to the value of the underlying index to profit from any parity deviations?

• A)parity trading
• B)index trading
• C)program monitoring
• D)inverted arbitrage
• E)index arbitrage

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Definitions:

Actuaries

Professionals who assess the financial impact of risk and uncertainty, utilizing mathematics, statistics, and financial theory to study uncertain future events, especially in the insurance and finance fields.

Unrecognized Prior Service Cost

Costs related to pension plan benefits earned in previous periods but not recognized at that time, due to changes in plan terms or estimations.

Years-of-Future-Service Method

The Years-of-Future-Service Method is a technique used in accounting to calculate pension or retirement benefits, based on the projected years of service of an employee.

Defined Benefit Pension Plan

A retirement plan where the employer guarantees a specific retirement benefit amount for the employee based on factors such as salary history and length of employment.