company has a $36 million equity portfolio with a beta of 0.9. The futures price on the S&P index for a contract delivering in 6 months is currently trading at 900. Futures contracts on $250 times the index can be traded. What trade is necessary to increase the beta to 1.2 over the next 4 months? O Long 48 futures contracts and close out the position in 4 months O Long 48 futures contracts and close out the position in 6 months O Short 48 futures contracts and close out the position in 4 months O Short 48 futures contracts and close out the position in 6 months O Short 192 futures contracts and close out the position in 6 months
company has a $36 million equity portfolio with a beta of 0.9. The futures price on the S&P index for a contract delivering in 6 months is currently trading at 900. Futures contracts on $250 times the index can be traded. What trade is necessary to increase the beta to 1.2 over the next 4 months? O Long 48 futures contracts and close out the position in 4 months O Long 48 futures contracts and close out the position in 6 months O Short 48 futures contracts and close out the position in 4 months O Short 48 futures contracts and close out the position in 6 months O Short 192 futures contracts and close out the position in 6 months
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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company has a $36 million equity portfolio with a beta of 0.9. The futures price on the S&P index for a contract delivering in 6 months is currently trading at 900. Futures contracts on $250 times the index can be traded. What trade is necessary to increase the beta to 1.2 over the next 4 months?
O Long 48 futures contracts and close out the position in 4 months
O Long 48 futures contracts and close out the position in 6 months
O Short 48 futures contracts and close out the position in 4 months
O Short 48 futures contracts and close out the position in 6 months
O Short 192 futures contracts and close out the position in 6 months
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