) WITH RESPECT TO CLIENT D'S MARKET VIEW, ALLISON WILL MOST LIKELY

Section 4.2

4.) With respect to Client D's market view, Allison will most likely:

A.

buy S&P 500 Index Futures and buy U.S. Treasury bond futures

B.

sell S&P 500 Index Futures

C.

sell U.S. Treasury bond futures

Answer = B

Selling the S&P 500 Index futures will be a profitable trade should the index decline to

925, and it effectively converts a long stock position into cash.

“Risk Management Applications of Forward and Futures Strategies,” by Don M. Chance