Stock Index Futures and Options Are Sometimes Referred to as Derivative

question 47

Multiple Choice

Stock index futures and options are sometimes referred to as derivative products because they:

• A)are often used as part of program trading.
• B)make the market less volatile.
• C)have intrinsic characteristics.
• D)derive their existence from actual market indexes.

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Definitions:

Duopoly

A market structure where two companies dominate the market for a particular product or service.

Joint Profits

The combined earnings or profits generated by a partnership or collaboration between two or more entities or firms.

Non-collusive Oligopolist

A firm in an oligopoly market structure that independently sets prices or output levels without engaging in explicit agreements with rivals.

Equilibrium Price

The price at which the quantity of a good or service supplied equals the quantity demanded, resulting in no surplus or shortage in the market.