On the maturity date, stock index futures such as the S&P500 contract require delivery of ____________.
A) common stock
B) cash
C) treasury bills
D) common stock and accumulated dividends

Question

Quizplus · Accepted Answer

Stock index futures such as the S&P500 contract are settled in cash on the maturity date. This means that the buyer and seller exchange cash, with the amount being determined by the difference between the futures price agreed upon and the actual spot price of the underlying stocks. No physical delivery of stocks or other assets is required. Therefore, option (B) cash is the correct answer.

On the Maturity Date, Stock Index Futures Such as the S&P500