If a Stock Index Futures Contract Is Overpriced,you Would Exploit

question 37

Multiple Choice

If a stock index futures contract is overpriced,you would exploit this situation by:

• A)selling both the stock index futures and the stocks in the index.
• B)selling the stock index futures and simultaneously buying the stocks in the index.
• C)buying both the stock index futures and the stocks in the index.
• D)buying the stock index futures and selling the stocks in the index.
• E)None of the above.

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Definitions:

Parallelism

A writing or speaking technique where parts of a sentence have the same or similar grammatical structure.

Production Facilities

Industrial sites or buildings where goods are manufactured or assembled.

Consumer Demands

The needs or desires of consumers for products or services that drive the market demand.

Parallelism

The use of components in a sentence that are grammatically the same, or similar in construction, sound, meaning, or meter.