You Believe That the Spread Between the September S&P 500

question 3

Multiple Choice

You believe that the spread between the September S&P 500 future and S&P 500 index is too large and will soon correct.This is an example of ______________.

• A) pairs trading
• B) convergence play
• C) statistical arbitrage
• D) long/short equity hedge

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Definitions:

Naysayers

Individuals who express negativity or skepticism towards ideas, plans, or changes, often discouraging progress.

Misses

In the context of signal detection theory, instances where a present signal is not detected or recognized.

Pupil

The opening in the center of the iris of the eye that regulates the amount of light that enters.

Saturation

In color theory, the intensity or purity of a color; in chemistry, the point at which a solution can dissolve no more of a substance.