When the Portfolio Manager Wants to Hedge a Stock Portfolio

question 33

True/False

When the portfolio manager wants to hedge a stock portfolio using an index futures contract,he or she must know: 1)the total dollar value of the portfolio,2)the current index futures price 3)the relative volatility of the portfolio to the market.

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Definitions:

Value Judgments

Evaluations based on personal or societal standards of what is important, good, or desirable.

Objectivity

The observation of things as they exist in reality as opposed to one’s feelings or beliefs about them.

Sexual Norms

The accepted rules and behaviors regarding sexuality within a society, which guide sexual conduct and expectations.

Scholar

An individual who engages in or has expert knowledge of academic study or scholarship in a particular field.