You Are Given the Following Information About a Portfolio You

question 1

Multiple Choice

You are given the following information about a portfolio you are to manage. For the long term, you are bullish, but you think the market may fall over the next month. $\begin{array}{lc} \text { Portfolio Value} &\$ \quad \text { 1million } \\ \text { Portfolio's Beta} &0.60\\ \text { Current S\&P500 value } &1400\\ \text {Anticipated S\&P500 Value } &1200\\\end{array}$

For a 200-point drop in the S&P 500, by how much does the value of the futures position change?

• A) $200,000
• B) $50,000
• C) $250,000
• D) $500,000
• E) $100,000

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Definitions:

Good Behavior Game

A type of group-oriented contingency that encourages competition between groups and cooperation within groups. Classroom rules are posted and reviewed, and then the class is divided into two or more groups. The teacher makes a tally mark on the chalkboard whenever she observes a student breaking one of the rules. The team with fewer than five tally marks “wins” free time and other privileges at the end of the day. Both teams can “win” if neither has more than five tally marks.

Token Economy

A behavior modification system that uses tokens as reinforcement for desired behaviors, which can be exchanged for rewards.

Token-Storage System

A behavioral modification system where tokens are earned for desired behaviors and can later be exchanged for rewards.

Peer Pressure

The influence exerted by a peer group, encouraging individuals to change their attitudes, values, or behaviors to conform to group norms.