Assume That a Stock Mutual Fund Uses Stock Index Futures

question 16

Multiple Choice

Assume that a stock mutual fund uses stock index futures as it conducts dynamic asset allocation. This means that the mutual fund

• A) liquidates its stocks whenever it expects a market downturn.
• B) maintains a constant buy position in stock index futures.
• C) maintains a constant sell position in stock index futures.
• D) none of the above

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Definitions:

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