If You Sell in April a Stock Index Future Contract

question 97

Multiple Choice

If you sell in April a stock index future contract on the S&P 500 index at the price of 1050 points that matures on June 30 of the same year and on the maturity date the S&P 500 Index is at 1047, you have a ________ of $________.

• A)loss; 750
• B)loss; 3
• C)profit; 750
• D)profit; 3

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Definitions:

Economic

Related to the production, consumption, and transfer of wealth within a community or society.

Interest Rate

The amount of money paid for the use of borrowed funds.

Legal/Regulatory

Pertaining to laws, regulations, and legal standards that govern the operations, actions, and compliance requirements of individuals and organizations.

Generic Competitive Strategies

Frameworks proposed by Michael Porter that describe three potential strategies to achieve a sustainable competitive advantage: cost leadership, differentiation, and focus.