Index arbitrage refers to
A)simultaneous trading in stock index futures and the underlying stocks.
B)selling futures contracts and buying options contracts on the same stock.
C)buying futures contracts and selling options contracts on the same stock.
D)selling futures contracts on stocks and buying equivalent futures contracts on bonds.

Question

Quizplus · Accepted Answer

Index arbitrage involves simultaneously trading in stock index futures and the underlying stocks to profit from any price discrepancies between the two markets. The goal is to take advantage of any temporary mispricing between the futures and cash markets.

Index Arbitrage Refers to