Assume That You Manage an Equity Portfolio

question 33

Multiple Choice

Assume that you manage an equity portfolio. The portfolio beta is 1.15. You anticipate a decline in equity values and wish to hedge $500 million of the portfolio. Calculate the number of contracts you would need to hedge your position and indicate whether you would go short or long. Assume that the price of the S&P 500 futures contract is 1105 and the multiplier is 250.

• A) 2500 contracts short
• B) 1810 contracts short
• C) 1810 contracts long
• D) 2081 contracts short
• E) 2081 contracts long

---

Definitions:

Cosmopolitanism

The ideology or disposition advocating for global citizenship, where individuals belong to a single moral community beyond national or local identities.

White Guilt

A feeling of guilt or responsibility that some white people may experience for the historical and ongoing racial injustices committed by others of their race.

Racial Awareness

The understanding and recognition of the differences in race and ethnicity, as well as the dynamics of racism and its impact on individuals and society.

White Racial Identity

The concept of identifying or understanding oneself in terms of race, specifically within the context of being white, often involving awareness of privilege and issues of racism.