Which of the following statements about index futures is false?
A)Index futures are cash-settled.
B)Index futures track the underlying index.
C)Index futures are rarely shorted because it is very difficult to borrow all the stocks in the index in the correct proportions in order to effect the short.
D)Index futures are marked-to-market daily.

Question

Quizplus · Accepted Answer

Index futures the world over are liquid and easy to short.No borrowing of stocks in the index is required to effect the short (or even at settlement time since the futures are cash-settled).

Which of the Following Statements About Index Futures Is False