Which of the Following Statements About Index Futures Is False

question 19

Multiple Choice

Which of the following statements about index futures is false?

• A) Index futures are cash-settled.
• B) Index futures track the underlying index.
• C) Index futures are rarely shorted because it is very difficult to borrow all the stocks in the index in the correct proportions in order to effect the short.
• D) Index futures are marked-to-market daily.

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Definitions:

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the premium paid over the fair market value of the net identifiable assets.

Retrospectively Apply

The action of applying a new accounting policy to transactions, other events, and conditions as if that policy had always been applied.

Fair-Value Method

Fair-Value Method is an accounting approach where assets and liabilities are recorded at their current market value, reflecting potential changes over time.