What is the difference between the long and the short positions in a contract for the future

Question:

What is the difference between the long and the short positions in a contract for the future delivery of the S&P 500 stock index? If you expect stock prices to fall, do you buy or sell stock index futures?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Investments An Introduction

ISBN: 978-0324561388

9th Edition

Authors: Herbert B Mayo

See More Books

Question Posted: Jun 26, 2012 07:12 AM

See More Questions

What is the difference between a long and a short position in a commodity future?
What is the difference between a long form opinion letter and a short form opinion letter?
What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declare a 100% stock dividend or a 2-for-1 split? Assume that either action...
In what respects did certain employees regard the University of Baths culture under Breakwell as falling short of the aspirations described in the 2016-21 strategic plan?
A Focus on Fraud feature presented in the chapter discussed the SEC's complaint against Benjamin Silva III, Tvia's vice president of worldwide sales. The complaint alleges a number of actions taken...
Ultraviolet light from the Sun converts oxygen molecules in the upper atmosphere to ozone molecules. Draw the reaction profile for the reaction: 30(g) + heat UV 2 03(8)
Assume you are the marketing manager for Smith Ltd in exercise 22.14, and the accountant explains that when the actual results were compared with budget results he found a favourable sales price...
Profit margins and turnover ratios vary from one industry to another. What differences would you expect to find between a grocery chain such as Safeway and a steel company? Think particularly about...
Need absolute coordinates for cad drawing below 10 5.0 5.0 4.0 10.0 8.0- 3.0 2.0 1.0- 0.5 10.0 2.0 45 4.0 3.0 9.6 www.myCADsite.com 7.0
The Davis Lamp Company (DLC) is a wholesale company that purchases lamps from the manufacturer and resells them to retail stores. The company has three inventory items: desk lamps, table lamps, and...
If you anticipated that the price of the British pound would rise and wanted to speculate on that increase, should you sell or buy a contract for the delivery of pounds?
How do changes in the futures market for stock indexes affect the stock market? Why may stock index futures and programmed trading result in dramatic price changes in individual stocks?
Assume that Arctic Cat produces a batch of 1,000 snowmobile helmets. Does it account for this as 1,000 individual jobs or as a job lot? Explain (consider costs and benefits).
From the different economists introduced, who do you think has had the most influence on modern behavioural economics and why?
What are the basic elements of the sports marketing mix?
What are the key differences between belief learning and reinforcement learning and how are the differences reconciled within experience-weighted attraction models?
Describe, in detail, the family life cycle and how it is used as a strategic tool when segmenting sports markets. What stage of the family life cycle are you currently in? How does this affect your...
What are the relative advantages and disadvantages of conventional economic and behavioural theories of risk?
What is a bottom-up budgeting system?
1. What are some current issues facing Saudi Arabia? What is the climate for doing business in Saudi Arabia today? 2. Is it legal for Auger's firm to make a payment of $100,000 to help ensure this...
Explain what this fragment of code does instruction by instruction and what purpose it achieves ( assuming that register r0 is the register of interest). Note that the data in r0 must not be 0 on...
Fairmont Enterprises has an expected return of 15% and Laval News has an expected return of 20%. If you put 70% of your portfolio in Laval and 30% in Fairmont, what is the expected return of your...
You are considering how to invest part of your retirement savings. You have decided to put $200,000 into three stocks: 50% of the money into Gold Finger (currently $25/ share), 25% of the money into...
Stock A and B have the following returns: _________________ Stock A _______________ Stock B 1 .......................... 0.10 ........................... 0.06 2 .......................... 0.07...
Consider the vectors u=2ij2k and v=2i+2j+4k. Find the vector components of u that are parallel and perpendicular to v.
1. Determine whether the following sets form subspaces and justify your answers. (a) {(1, 2): 122 = 0} in R (b) {(1, 2) |1|-|x2|} in R2 (c) {(x1, x2, x3): x3 = 21 or x3 = 12} in R3 (d) {(x1, x2, x3):...
Solve the system of two equations for y two equations are: A1=ax+by A2=cx+dy

What is the difference between the long and the short positions in a contract for the future

Question:

Step by Step Answer:

The difference in the long and short positions is that the long position is a purchase of ...View the full answer

Investments An Introduction

Students also viewed these Accounting questions