What Is the Growth Rate of an Index Futures Price

question 8

Multiple Choice

What is the growth rate of an index futures price in the risk-neutral world?

• A) The excess of the risk-free rate over the dividend yield
• B) The risk-free rate
• C) The dividend yield on the index
• D) Zero

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Definitions:

Displacement

An aggressive mechanism in which an individual directs his or her anger toward someone who is not the source of the conflict.

Bending Moments

A measure of the bending effect on an element due to external forces or moments applied to it, crucial in the design and analysis of structures.

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety or to maintain a sense of self-esteem.

Displacement

The transfer of emotions or reactions from the original source of stimulation to another target.