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PRMIA Exam 8006 Topic 3 Question 100 Discussion

Actual exam question for PRMIA's 8006 exam
Question #: 100
Topic #: 3
[All 8006 Questions]

Which of the following best describes the efficient frontier?

Show Suggested Answer Hide Answer
Suggested Answer: A

The correct answer is the index value times the contract size, in this case 1500 x 50.

One way to think about index futures is this: Consider equity index trading as trading in the shares of a company whose share price is equal to a number of dollars which is the same as the index. If the 'contract multiplier' for a index futures contract is 50, that means the futures contract is for 50 shares of such a fictitious company. Therefore the notional value of the contract will be 15000 x 50, and Choice 'a' is the correct answer.


by Shenika at Sep 13, 2024, 08:16 AM

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Theron
6 months ago
I'll take option B - 200. Because why not? It's not like I'm going to actually use this information in the real world anyway.
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Stanton
5 months ago
I'll take option B - 200.
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Jacquline
5 months ago
I'll go with C) 50.
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Luisa
5 months ago
I think the answer is A) 75000.
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Elbert
6 months ago
I agree with Lili, the notional value is calculated by multiplying the index value by the contract multiplier, so it's A) 75000.
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Lili
6 months ago
I think it's A) 75000 because you multiply the index value by the contract multiplier.
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Zana
6 months ago
Who cares about the notional value? I just want to know if I can trade this contract using Robinhood. That's all that matters these days, right?
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Carolann
4 months ago
C) 50
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Lai
5 months ago
Who cares about the notional value? I just want to know if I can trade this contract using Robinhood. That's all that matters these days, right?
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Maryann
5 months ago
B) 200
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Walton
5 months ago
A) 75000
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Vilma
6 months ago
Hmm, this question is as easy as pie. The notional value is simply the index value times the contract multiplier. A no-brainer!
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Fatima
6 months ago
Wait, what? The contract multiplier is $50, so the notional value should be $50 times the index value of 1500, which is $75,000. Easy peasy!
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Tracey
6 months ago
Hmm, I'm not sure. I'm going to go with option D - the index value itself. Seems logical to me.
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Fabiola
5 months ago
I agree with you, option D) 1500 makes sense
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Ty
5 months ago
I believe it is C) 50
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Brett
6 months ago
I think the answer is A) 75000
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Anissa
6 months ago
A) 75000
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Dyan
6 months ago
The notional value is definitely 75,000. I learned this in my finance class!
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Jani
5 months ago
No, the correct answer is A) 75000.
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Loreen
5 months ago
B) 200
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Aleisha
6 months ago
That's correct! The notional value is indeed $75,000.
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Jesus
6 months ago
A) 75000
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