How Is a Futures Contract on the S&P 500 Settled

question 71

Multiple Choice

How is a futures contract on the S&P 500 settled?

• A) cash
• B) shares of stock selected by the contract buyer
• C) shares of stock selected by the contract seller
• D) shares of stock equivalent to those in the index
• E) delivery of a Treasury bill equal in value to the settlement amount

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Definitions:

Output of Industry

The total amount of goods and services produced by an industry or sector within a specific period, often used to gauge economic health and productivity.

Economic Profit

The difference between total revenues and total costs, taking both explicit and implicit costs into account, indicating the additional income over the opportunity cost of capital.

Industry Z

An unspecified sector of the economy, used as a placeholder to discuss economic concepts without specifying an industry.

Output Expansion

The increase in the production of goods or services by a firm or economy over time.