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Question
You own a portfolio which is valued at $6.4 million and which has a beta of 1.27. You would like to create a riskless portfolio by hedging with S&P 500 futures contracts. The contract size is $250 times the index level. How many futures contracts are needed if the current S&P 500 index is 1406?A. short 16 contracts
B. short 18 contracts
C. short 23 contracts
D. long 18 contracts
E. long 23 contracts
Answer
This answer is hidden. It contains 2 characters.
Related questions
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What are the advantages and the disadvantages of a homeowner selecting a 30-year mortgage rather than a 20-year mortgage?
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Q:
Which one of the following statements regarding an original issue $25,000 GNMA bond is correct?
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B. The investor will receive fixed quarterly interest payments.
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Q:
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A. advantage; advantage
B. advantage; disadvantage
C. disadvantage; advantage
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Q:
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Q:
If wages grew 3.15 percent in 2013, but inflation was 2.75 percent, what was the approximate real increase in wages?
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C. 0.30%
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Q:
Assume there are 475 million people in the United States, 175 million of which make up the labor force. If 16 million are unemployed, what is the unemployment rate?
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Q:
An analyst gathered the following year-end price level data for an economy. What is the economy's annual inflation rate for 2012?A. 3.22%B. 3.42%C. 3.68%D. 3.87%E. 3.92%
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Assume the inflation rate in 2012 is 2.1 percent. If the nominal GDP grew 3.2 percent and nominal wages grew 2.6 percent, what are the approximate real growth rates of GDP and wages?
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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B. accept the call; they have no other choice
C. convert their bonds; the conversion price exceeds the par value by $37.90
D. convert their bonds; the conversion price exceeds the call price by $12.90
E. elect to continue holding their bonds; they want to continue receiving the interest payments
Q:
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C. $1,481.10
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E. $1,652.00