The Value of a Stock Index Futures Contract Has Little

question 63

True/False

The value of a stock index futures contract has little correlation with the value of the underlying stock index.

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Definitions:

Utility Function

A mathematical representation that describes how consumers rank preferences among different commodity bundles.

Campers' Utility

A hypothetical measure of the satisfaction or happiness that campers gain from participating in camping activities or utilizing camping facilities.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be either positive or negative.

Groschens

A historic European coin of small denomination, particularly used in Austria and Germany.