Who Would Be Most Likely to Buy a Long Stock

question 30

Multiple Choice

Who would be most likely to buy a long stock index future?

• A)a mutual fund manager who believes the market will rise
• B)a mutual fund manager who believes the market will fall
• C)a mutual fund manager who believes the market will be stable
• D)none of the above would be likely to purchase a futures contract

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Definitions:

Net Present Value

A method used in capital budgeting to analyze the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows over a period of time.

Pretax Return

The earnings generated by an investment or business before taxes have been deducted.

Investment Projects

Initiatives undertaken by businesses or individuals to invest capital with the expectation of generating financial returns over time.

Catering Business

A service-based industry that provides food preparation, cooking, and presentation services for events and gatherings.