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A funds manager assigned to invest $10 milion S&P 500 share portfolio with a beta...

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Finance

A funds manager assigned to invest $10 milion S&P 500 share portfolio with a beta of 1 in next three months, but is concerned that stock prices in the market will fall over the next three months. The S&P 500 Index currently is standing at 2000 , meanwhile CME quoted S&P 500 futures Contract Equity Index price at 2000. Three months later, when the manager closes out the position, the contract is trading at 2,074 whereas the S&P 500 Index stands at 2100. One index point worth $250.

Calculate the net worth for the value of investment three months later.

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