If You Purchased One S&P 500 Index Futures Contract at a Price

question 32

Multiple Choice

If you purchased one S&P 500 Index futures contract at a price of 1,550 and closed your position when the index futures was 1,547, you incurred

• A) a loss of $1,500.
• B) a gain of $1,500.
• C) a loss of $750.
• D) a gain of $750.
• E) None of the options are correct.

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Definitions:

Coefficient of Variation

A standardized measure of dispersion of a probability distribution or frequency distribution, often expressed as a percentage.

Variance

A measure of the dispersion or spread of a set of data points around their mean value.

Minimin Strategy

A decision rule used in scenarios involving uncertainty, where the decision maker aims to minimize the potential for the worst-case scenario.

Maximum Payoff

The highest possible return that can be achieved from an investment or decision scenario.