An attempt to exploit differences between the prices of a stock index futures contract and the prices of the underlying stocks is known as:
A) index programming.
B) arbitrage speculation.
C) index arbitrage.
D) program speculation.

Question

Quizplus · Accepted Answer

Index arbitrage involves taking advantage of price discrepancies between stock index futures and the underlying stocks to make a profit.

An Attempt to Exploit Differences Between the Prices of a Stock