Portfolio - $1 billion Beta: 2.0 Forward Contract : $1 billion, todays index (spot) price...

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Accounting

Portfolio - $1 billion

Beta: 2.0

Forward Contract : $1 billion, todays index (spot) price is 100, forward contract price 1 year from now is 95.

Swap: $1 billion, you will pay the rate of return on the NCREIF NPI and receive a fixed 2% in exchange.

- Question: Which do you prefer, the forward contract or the swap? Explain.

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