If You Buy in April a Stock Index Future Contract

question 67

Multiple Choice

If you buy in April a stock index future contract on the S&P 500 index at the price of 1000 points that matures on June 30 of the same year and on the maturity date the S&P 500 Index is at 900, you have a ________ of $________.

• A)loss; 25000
• B)loss; 100
• C)profit; 25000
• D)profit; 100

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Definitions:

Emissions Tax

An emissions tax is designed to reduce environmental harm by charging a fee for the emission of pollutants, incentivizing businesses and individuals to decrease their environmental impact.

Socially Optimal

A condition or outcome that maximizes the well-being of society as a whole, often considered in economic policies or strategies.

Marginal Social Cost

The total cost to society of producing one additional unit of a good or service, including both private costs and externalities.

Marginal Social Benefit

The additional benefit that society gains from consuming an additional unit of a good or service.