One of the Major Uses of a Stock Index Future

question 21

Multiple Choice

One of the major uses of a stock index future is the ability:

• A)To use it to hedge
• B)To make an unlimited amount of money
• C)To increase risk
• D)All of the above

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Definitions:

Full Capacity Sales

Full capacity sales refer to the maximum sales level that a company can attain with its current production capacity and resources, without additional investment.

Net Income

A company's revenue minus all its expenses and taxes equals its total income.

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted to cash in the near term.

Additional Funds Needed

The extra amount of financing a company requires to fund its operations and growth beyond its current financial resources.