All Else the Same, as the Price of a S&P

question 13

Multiple Choice

All else the same, as the price of a S&P 500 futures used to hedge an equity portfolio increases, the number of contracts needed to hedge the portfolio will:

• A) increase.
• B) decrease.
• C) not change.
• D) increase if the beta of the portfolio is greater than one.
• E) decrease if the beta of the portfolio is greater than one.

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