Assume That a Stock Mutual Fund Uses Stock Index Futures

question 1

Multiple Choice

Assume that a stock mutual fund uses stock index futures as it conducts dynamic asset allocation. This means that the mutual fund

• A)liquidates all of its stock holdings whenever it expects a market downturn.
• B)maintains a constant buy position in stock index futures.
• C)maintains a constant sell position in stock index futures.
• D)None of these are correct.