Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. on july 1, an investor holds 50,000 shares of a ce

On July 1, an investor holds 50,000 shares of a certain stock. The market price...

60.1K

Verified Solution

Question

Finance

On July 1, an investor holds 50,000 shares of a certain stock. The market price is $95 per share. The investor is interested in hedging against movements in the market over the next month and decides to use the September S&P 500 futures contract. The index futures price is 2,236 and one contract is for delivery of $50 times the index. The beta of the stock is 1.1. How many futures contracts should the investor enter (after rounding to the nearest contract)? (enter positive number for long contracts and negative number for short contracts)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Give the equation of the inverse of each function a f x 3x 5 b...

Basic Math
Q

We throw a die independently four times and let X denote the minimal value rolled. (a)...

Basic Math
Q

Study the chart Percentage of Total Population Living in Central Cities and Suburbs 1910 2000...

Biology
Q

On a frictionless horizontal air table, puck A (with mass 0.253 kg) is moving toward...

Physics
Q

Circle is shown with points A B C and D on Circle O A D...

Geometry
Q

Consider the following sets A 6x x EN B 3x x Z C 3x x...

Basic Math
Q

Find the following root 5 1 32

Calculus
Q

QUESTION 11 CRE CLOs can be static or managed True False 11B. CRE CDOs...

Accounting
Q

The ledger of Platt Company has the following work in process account: ...

Accounting
Q

By-product costing approaches include: Multiple Choice Resource consumption approach. Sales value...

Accounting
Q

Bailand Company purchased a building for $210,000 that had an estimated residual value of $10,000...

Accounting
Q

Standard Direct Materials Cost per Unit Crazy Delicious Inc. produces chocolate bars. The primary materials...

Accounting