On January 1, You Bought One April S&P 500 Index

question 2

Multiple Choice

On January 1, you bought one April S&P 500 index futures contract at a futures price of 1,420. If, on February 1, the April futures price was 1,430, what would be your profit (loss) if you closed your position (without considering transactions costs) ?

• A) $2,500 loss
• B) $10 loss
• C) $2,500 profit
• D) $10 profit

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Definitions:

Autarky

A situation or policy whereby a country or economy is self-sufficient and does not engage in international trade.

Netherlands

The Netherlands is a country in Northwestern Europe known for its flat landscape, extensive canal systems, cycling routes, and tulip fields.

Tulips

A type of flowering plant known for its bright colors and bulbous shape, often associated with the Netherlands.

Ricardian Model

An economic theory that focuses on comparative advantage, suggesting that countries should specialize in producing goods they can produce most efficiently.