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stock index futures

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Describe stock index futures. How could they be used by a financial institution that is anticipating a jump in stock prices but does not yet have sufficient funds to purchase large amounts of stock? Explain why stock index futures may reflect investor expectations about the market more quickly than stock prices.

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This solution discusses stock index futures.

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A stock index future takes the total average value of all of the stocks that make up that index at any point in time. Then, it has an end date in about 3 months. That end date is the value of your future contract, should you hold it until that expire date. So, for example at present (I am looking at my chart on the screen) the December contract for the S&P 500 index future is ...

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