An Equity Forward Contract Is

question 26

Multiple Choice

An equity forward contract is

• A)a forward contract on LIBOR secured by a stock as collateral
• B)a futures contract on a stock index that is not marked-to-market
• C)a call option on a stock with greater downside risk than an ordinary call
• D)a forward contract whose payoff is determined by a stock or index
• E)none of the above

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Definitions:

Le Bon

A reference to Gustave Le Bon, a French social psychologist best known for his work on crowd psychology and the psychology of revolution.

Large Crowds

refers to gatherings of a considerable number of individuals in a specific location, which can influence behavior, mentality, and social dynamics.

Milgram

Refers to Stanley Milgram, a psychologist known for his experiments on obedience, demonstrating how people are willing to follow authorities even to the extent of harming others.

Confederates

Individuals who are part of a larger group or cause, often used in the context of the American Civil War or in experimental research to describe participants who are in on the experiment's aims.