Futures is necessary to hedge the equity portfolio beta

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1. Suppose you are managing an equity portfolio with a beta of 2.8 and $99M in assets. S&P 500 index futures (not the e-mini futures) are currently priced at 2102, and the index is also 2102. What position in index futures is necessary to hedge the equity portfolio beta to 0?

2. FreddieMac reports a 30-year fixed rate mortgage at 4.9%, a 20-year mortgage at 4.75% and a 15-year mortgage at 4.50%. If you want to finance a $218,000 home, how much interest will you save if you refinance your loan for 15 years compared to 30 years?

Reference no: EM132028792

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