One of the Major Uses of a Stock Index Future

question 59

Multiple Choice

One of the major uses of a stock index future is the ability:

• A)to use it to hedge.
• B)to make an unlimited amount of money.
• C)to increase risk.
• D)All of the above

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Definitions:

Import Tariffs

Taxes imposed by a government on goods brought into its jurisdiction from foreign countries, typically used to protect domestic industries.

Consumer Surplus

The distinction between what consumers are willing and financially capable of paying for a product or service, and the actual expenditure.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, due to higher market prices.

Import Quota

A government-imposed limit on the quantity or value of goods that can be imported into a country, often used to protect domestic industries.