Current Affairs · Derivatives Market
Which statement regarding Index Futures contracts traded in financial markets is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1They require the actual physical delivery of all the underlying stocks.
- 2They are always traded at the exact same price as the underlying spot index.
- 3They are cash-settled, and their pricing is theoretically based on the cost of carry model.✓
- 4They are immune to broader market volatility and systemic risks.
Correct answer
They are cash-settled, and their pricing is theoretically based on the cost of carry model.
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