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Amiraneli [1.4K]
3 years ago
6

A manager is holding a $1.2 million stock portfolio with a beta of 1.01. She would like to hedge the risk of the portfolio using

the S&P 500 stock index futures contract. How many dollars’ worth of the index should she sell in the futures market to minimize the volatility of her position? (Enter your answer in dollar not in millions.)
Business
1 answer:
garri49 [273]3 years ago
5 0

Answer: $1,212,000 or $1.212 million

Explanation:

To calculate the dollars’ worth of the index the manager should sell in the futures market to minimize the volatility of her position, we can use the following formula,

Dollar worth of index to sell = Value of the Portfolio * Portfolio Beta

Dollar worth of index to sell = 1,200,000 * 1.01

Dollar worth of index to sell = $1,212,000

The manager should sell $1,212,000 worth of the index in the futures market to minimize the volatility of her position.

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This is a two part question and therefore has been answered in two separate headings below.

Explanation:

<u>Main Goal of CTSOs</u>

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This means that their work forms as an essential part of the classroom syllabus and guide, which in return helps to build student's career skills and  views through taking part in these sessions and applying them in real life scenarios and/or work experience through Career program.

<u>Help Students to Achieve their Goals</u>

Career and technical student organizations (CTSOs) helps students achieve their goals by providing them a career path, study program and opportunities in order to gain the knowledge, skills and abilities that are needed to be successful in their career by way of CTSOs programs, events and activities.

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The best answer for this question would be:

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Based on the available data for a player of Titus Johnston's profile, his guaranteed amount would be $32.74 million.

<h3>Calculations and Parameters</h3>

Given that Casey Deeselis a sports agent negotiating a contract for Titus Johnston, an athlete in the National Football League

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If we observe the best-pruned tree given below, based on the arrows and circles,

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The conclusion is that with the profile of Titus Johnston, he would receive a guaranteed amount of $32.74 million.

Read more about regression tree here:

brainly.com/question/28465511

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