Question
Select all that apply, Stock Indexes: A. Weights can be proportional to market prices, capitalization B. Track changes in the value of a hypothetical portfolio
Select all that apply, Stock Indexes:
A. | Weights can be proportional to market prices, capitalization
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B. | Track changes in the value of a hypothetical portfolio of stocks
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C. | Index calculation and maintenance is a big business
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D. | The weights of the individual stocks do not remain fixed
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A currency NDF:
A. | is similar to a forward foreign exchange contract
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B. | at maturity the NDF cash settles usually U.S. $
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C. | stands for Non Delineated Finance | |
D. | is dealt outside a country's jurisdiction |
What coupld cause the price of a forward to deviate from it's theoretical price for a given market participant?
A. | different funding opportunities | |
B. | that is not possible. Math is math and everyone has the same price | |
C. | privileged access to the market because of name recognition | |
D. | supply and demand considerations |
Suppose that the semi-annual (6 month) storage costs for crude oil are $4 per barrel, and the interest rate for borrowing or lending are 4.0% per annum (2% for 6 months) . How could you make money if the June (assume it's 6 month out) and the December (assume it's precisely 1 year out) futures contracts are $45/brl and $50/brl respectively? (Hint: think practically. If you buy a futures contract at expiration you will take delivery, what do you do with it? If you sell a contract you have to deliver.)
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