Index Options Are Settled

question 35

Multiple Choice

Index options are settled:

• A) by delivering a portfolio mimicking the index.
• B) by delivering an index mutual fund.
• C) in cash.
• D) by delivering an endowment funds.
• E) by delivering Treasury bills.

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Definitions:

Automatically

Something happening or occurring by itself, without manual intervention or external control.

Common Law

A body of unwritten laws based on legal precedents established by the courts, contrasting with statutory law.

Doctrine of Substantial Performance

A legal principle that allows a contracting party to enforce the contract even if there are minor breaches, provided substantial performance of the contract has been achieved.

Perfect Tender Rule

A principle in the Uniform Commercial Code allowing a buyer to demand a full compliance with the contract terms for goods.