You Own a Portfolio That Is Valued at $11,190,000 and Has

question 99

Multiple Choice

You own a portfolio that is valued at $11,190,000 and has a beta of 1.43. You would like to create a riskless portfolio by hedging using S&P 500 futures contracts. The contract size is $250 times the index level. How many futures contracts do you need to acquire if the current S&P 500 index is 1730?

• A)short 28 contracts
• B)short 37 contracts
• C)long 28 contracts
• D)long 37 contracts
• E)short 43 contracts

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Definitions:

Full Potential

The highest or fullest level of performance or achievement one can realistically attain.

Self-Respect

The regard one holds for oneself as a worthwhile, competent individual, often seen as a crucial aspect of mental health.

Conditional Positive Regard

Acceptance and love from others that depend on one’s behavior meeting certain conditions or standards.

Classical Conditioning

Learning resulting from pairing a conditioned stimulus with a new, unconditioned stimulus.