You Are Given the Following Information About a Portfolio You

question 39

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. $\begin{array}{lc} \text { Portfolio Value} &\$ \quad \text { 1million } \\ \text { Portfolio's Beta} &0.86\\ \text { Current S\&P500 value } &990\\ \text {Anticipated S\&P500 Value } &915\\\end{array}$


For a 75-point drop in the S&P 500, by how much does the futures position change?

• A) $200,000
• B) $50,000
• C) $250,000
• D) $500,000
• E) $18,750

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Definitions:

Motivational Inferences

Judgments or conclusions drawn about the reasons or motivations behind others' behaviors.

Police Testimony

The evidence provided by police officers in court, based on their investigation and observations, which can influence the outcome of a trial.

Recall of Information

The ability to retrieve and reproduce previously encountered material from memory.