Assume That a Stock Mutual Fund Uses Stock Index Futures

question 16

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 its stocks 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 the above

---

Definitions:

Cerebellum

The cerebellum is a major structure of the brain involved in motor control, coordination, precision, and accurate timing, playing a significant role in fine-tuning movements and balance.

Brain Stem

The most inferior part of the brain, connecting the cerebrum with the spinal cord and controlling fundamental life-sustaining functions like breathing and heart rate.

Medulla

The inner region of an organ or the medulla oblongata, a part of the brainstem involved in autonomic functions.

Pons

A part of the brain stem that links the medulla oblongata and the thalamus, involved in regulating breathing and other functions.