A Manager Holds a Diversified Portfolio of British Stocks Worth $\beta$

question 4

Essay

A manager holds a diversified portfolio of British stocks worth £5 million. He has short-term fears about the market but feels that it is a sound long-term investment. He is a firm believer in betas, and his portfolio's $\beta$ is equal to 0.8. What are the alternatives open to temporarily reduce the risk on his British portfolio?

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Definitions:

Peptic Ulcers

Open sores that develop on the inner lining of the stomach, upper small intestine, or esophagus, often resulting from infection or the prolonged use of anti-inflammatory drugs.

Diarrhea

A condition characterized by the frequent passage of loose or watery stools.

Amino Acids

Organic compounds that combine to form proteins, serving as the building blocks of life and playing many critical roles in body functions.

Fatty Acids

Long hydrocarbon chains that are components of fats and oils, playing crucial roles in energy storage, cell structure, and signaling.