USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 39

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The S&P 500 stock index is at 1100. The annualized interest rate is 3.5 percent, and the annualized dividend is 2 percent.
-Refer to Exhibit 15.9. If the futures contract was currently available for 1250, indicate the appropriate strategy that would earn an arbitrage profit.

• A) long futures and short the index
• B) short futures and long the index
• C) long futures and long the index
• D) short futures and short the index
• E) None of these are correct.

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Definitions:

Valence

The perceived value or desirability of a reward or outcome, influencing an individual's motivation.

Expectancy

The belief or anticipation regarding the likelihood that a specific outcome or event will occur.

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A process aimed at reducing glucose levels in the blood, often through diet, exercise, or medication.

Behavioral Goals

Specific, observable actions or achievements one aims to reach through modification or reinforcement of behavior.