Exam 17: Stock Index Futures and Options

The profit of an index option is determined by

In a declining market,stock index futures can be used to hedge a stock portfolio to help offset losses in the portfolio.

If you have a put option on a stock index you hope the market will:

When basis increases with the passage of time,this is thought to be

Options on stock index futures

Stock index futures and options are sometimes referred to as derivatives.

Value Line future contracts tread on the Kansas City Board of trade.

An arbitrage is trading in

A primary difference between stock options and stock index options is

Which of the following is NOT an advantage of investing in stock index futures for the speculator?

An investor earns a profit on a put option when

The market for stock index futures began in February of 1982 when the NYSE began trading futures on the Dow Jones Industrial Average.

The value of a stock index futures contract is the product of ____ and the appropriate multiplier

Since there is never physical deliver of goods in the stock index futures market,all open transactions are automatically closed out on the settlement date.

The S&P 100 Index is composed of 100 blue chip stocks on which the CME currently has individual option contracts.

Stock index futures and options allow an investor to

The term basis represents the difference between the stock index futures price and the value of the underlying index.

The purpose of hedging with stock index futures is not to magnify the gains and losses on the hedged stock portfolio.

Each of the major stock index futures markets has a corresponding stock index options market.

The multiplier for the Dow Jones Industrial Average futures contract is