) 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