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Mr. Smith believes that there is going to be rise in the equities market. Based on this information, what would allow Mr. Smith to best take advantage of this situation?

Respuesta :

tutordamola

Answer:

The answer is 'Buy a Stock Index Future'

Explanation:

To take best advantage of this situation, Mr Smith should go long(buy) on this stock.

Stock Index Future js a method of derivates. Futures, like forward contract is a forward commitment which obligates the buyer to purchase an asset or the seller to sell an asset and have a predetermined future date and price. Future is used to hedge against worse future situations.

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