A Broker-Dealer May Go Short on S&P 500 Index Futures

question 1

Multiple Choice

A broker-dealer may go short on S&P 500 index futures to minimize

• A) market risk.
• B) interest rate risk.
• C) exchange rate risk.
• D) unsystematic risk.

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Definitions:

Straight Line

A geometric figure formed by a set of points in a fixed linear relationship, extending infinitely in both directions.

Variable

In economic and mathematical contexts, a variable is an element, feature, or factor that is liable to vary or change.

Infinite Slope

A mathematical concept where a line or curve on a graph approaches a vertical position, indicating a very steep, immeasurable change.

Curve

A smooth, continuous line or path that is not straight, often used in mathematics and economics to represent relationships between variables.