Which of the Following Statements About Index Futures Is False

question 14

Multiple Choice

Which of the following statements about index futures is false?

• A)Index futures are cash-settled.
• B)Index futures track the underlying index.
• C)Index futures are rarely shorted because it is very difficult to borrow all the stocks in the index in the correct proportions in order to effect the short.
• D)Index futures are marked-to-market daily.

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Definitions:

Profile

A description or analysis of something that presents its key characteristics or qualities.

Headwaters

The location or general area where a stream or river begins.

Perennial

Describes plants that live for more than two years or streams that flow continuously throughout the year.

Gradient

A rate of inclination or slope, or the rate at which a physical quantity changes with respect to change in another quantity.