The price of stock index futures may reflect investor expectations about the market more rapidly than stock prices.

Question

Quizplus · Accepted Answer

Stock index futures are contracts to buy or sell a financial index at a future date, and their prices can quickly adjust to new information or expectations about the market, often faster than individual stock prices can. This is because futures are highly leveraged and traded on margin, making them more sensitive to immediate market sentiments and expectations.

The Price of Stock Index Futures May Reflect Investor Expectations