Figure 17-8 -In Figure 17-8, Which of the Following Movements Reflects the Following

question 199

Multiple Choice

Figure 17-8

-In Figure 17-8, which of the following movements reflects the closing of a recessionary gap through the economy's self-correcting mechanism?

• A)A to B
• B)A to C
• C)C to E
• D)D to E

---

Definitions:

Arbitrage

The practice of exploiting price differences for the same asset in different markets by simultaneously buying and selling the asset to take advantage of those price differences.

Risk-free Rate

A forecasted return rate on a risk-free investment, usually shown through government security yields.

Futures Price

The agreed-upon price for the underlying asset in a futures contract to be paid at a future date.

Short Position

The futures trader committing to deliver the underlying asset.