A Portfolio Manager in Charge of a Portfolio Worth $10

question 5

Multiple Choice

A portfolio manager in charge of a portfolio worth $10 million is concerned that stock prices might decline rapidly during the next six months and would like to use put options on an index to provide protection against the portfolio falling below $9.5 million.The index is currently standing at 500 and each contract is on 100 times the index.What position is required if the portfolio has a beta of 1?

• A) Short 200 contracts
• B) Long 200 contracts
• C) Short 100 contracts
• D) Long 100 contracts

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Definitions:

Salespeople

Professionals engaged in the selling of products or services to potential customers.

Prospect's Objection

Any concern or issue raised by a potential customer that could hinder their decision to buy, necessitating addressal to move forward in the sales process.

Salesperson

An individual who sells products or services to customers, often directly interacting with them to facilitate sales.

Correct Action

The implementation of a decision or strategy that is deemed appropriate or beneficial in a particular situation to achieve a desired outcome.