Exhibit 21.11 Use the Information Below for the Following Problem(S)

question 88

Multiple Choice

Exhibit 21.11
Use the Information Below for the Following Problem(S)
Consider a portfolio manager with a $10,000,000 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 1350 and has a multiplier of 250. The portfolio beta is 1.50.
-Refer to Exhibit 21.11.Assume that a month later the equity portfolio has a market value of $10,000,000 and the stock index future is priced at 1300 with a multiplier of 250.Calculate the profit (loss) on the stock index futures position.

• A) -$1,050,000
• B) -$550,000
• C) -$50,000
• D) $550,000
• E) $1,050,000

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Definitions:

Preventative Care

Health care practices aimed at preventing diseases or detecting them early to ensure better outcomes.

Helping

Helping refers to the act of providing support or assistance to others in need, often aimed at improving their situation or well-being.

Establishing Rapport

The process of building a positive relationship between individuals based on trust, understanding, and mutual respect.

Mindfulness

A mental practice focusing on the present moment in a nonjudgmental manner, often used as a technique to manage stress and improve mental health.