Stock market is about to undergo sharp retreat

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Reference no: EM131816204

1. Assume an investor thinks the stock market is about to undergo a sharp retreat. Under these conditions, the investor’s best course of action would be to

A) buy stock-index futures contracts.

B) short sell stock-index futures contracts.

C) use stock-index futures to sit out the market.

D) use a long hedge against the investor’s existing positions.

2. Motter, Inc. preferred stock pays an annual dividend of $1.80. The market is currently yielding 7.5% on similarly rated issues. What is the value of one share of this stock?

A) $13.50

B) $18.00

C) $24.00

D) $25.80

Reference no: EM131816204

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