Exhibit 21.8 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 67

Multiple Choice

Exhibit 21.8
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Consider a portfolio manager with a $20,500,000 equity portfolio under management. The manager wishes to hedge against a decline in share values using stock index futures. Currently a stock index future is priced at 1250 and has a multiplier of 250. The portfolio beta is 1.25.
-Refer to Exhibit 21.8. Calculate the overall profit.

• A)$1,550,000
• B)-$2,000,000
• C)$2,050,000
• D)-$5,000,000
• E)$2,400,000

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Business Intelligence System

Systems used to analyze and interpret data in order to enable managers to make informed decisions about how best to run a business.

Business Information System

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Consumer Level

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