You Own a Portfolio Which Is Valued at $10 Million

question 53

Multiple Choice

You own a portfolio which is valued at $10 million and has a beta of 1.5. 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 1500?

• A)short 30 contracts
• B)short 40 contracts
• C)long 25 contracts
• D)long 30 contracts
• E)short 50 contracts

Comprehend the different methodologies and perspectives on risk management.

Recognize various risk management strategies, including sharing, transfer, and mitigation.

Grasp the concept of project risk as an uncertain event affecting project objectives.

Acknowledge the complexity and risk levels associated with emerging technologies in projects.

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Definitions:

Mutual Basis

A foundation for a relationship or agreement characterized by shared interests, benefits, or responsibilities.

Expression of Feelings

The act of communicating or revealing one's emotions and sentiments to others.

Outcomes

The results or consequences of actions, particularly in the context of patients' health status after receiving medical treatment or intervention.

Blameless Culture

An approach in an organization where mistakes are treated as learning opportunities, focusing on system improvements rather than assigning personal blame.