How many contracts should she buy or sell

Assignment Help Accounting Basics
Reference no: EM133063968

Question - Morgan is a value investor that picks stocks that are undervalued. Her Beta is .4. She wants her portfolio to be much more sensitive to the market, and would like to have a Beta of 1.0. The value of her portfolio is 800 million, and S&P500 futures are trading at 4000. S&P 500 futures are 250 x (the index) per contract.

a) How many contracts should she buy or sell?

What if she wanted the Beta to be -.20, since she is bearish on the market (her starting point is a Beta of .4)?

b) How many contracts would she buy or sell?

Reference no: EM133063968

Questions Cloud

What is the liquidation value of Magi House : Magic House is to be liquidated. All creditors, both secured and unsecured, are owed P 2 million. What is the liquidation value of Magi House
Explain the causes of the pandemic : Use a business cycle theory of your choosing (Neoclassical, Post Keynesian, or Austrian) to explain the causes of the pandemic-induced recession.
What is the largest amount of leisure : Your employer asks you to start working out of the main office, which will involve commuting by subway for 3 hours every day.
Income and substitution effects : Suppose you decide to keep working after the three hour commute is introduced. Relative to part (a), do you expect your leisure hours to increase
How many contracts should she buy or sell : The value of her portfolio is 800 million, and S&P500 futures are trading at 4000. S&P 500 futures are 250 x (the index) per contract. How many contracts buy
What amount of operating costs will be budgeted : If a single-rate cost allocation method is used, what amount of operating costs will be budgeted for the Lawnmower Division each month
How much is the actual foh cost : The following information is available for the year 2021: Budgeted machine hours, 271,000 MH; How much is the actual FOH cost
Determine the amount received by axe upon his retirement : Allowance for uncollectible accounts of P20,000 should be provided. Determine the amount received by Axe upon his retirement
Calculate the amount of inventory destroyed : Calculate the amount of inventory destroyed and the amount of the insurance claim assuming that the company had always earned a gross profit of 33.33%

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is free cash flow to equity

Assume the following: OCF = 30,000, NWC this year end = 10,000 and NWC last year end = 8,000. What is free cash flow to Equity

  What is the actual CVP equation

There are so many equations when it comes to the Cost-Volume-Profit and they confuse me just starting out. What is the actual CVP equation

  Review complete cycle-permanent fund

Dr. Theodore Dough made a $500,000 gift to the Village of Radnor. Dr. Dough stipulated that the corpus of the gift.

  Prepare amortization table using effective interest method

The prevailing rate of interest for this type of note is 12%. Prepare the amortization table using effective interest method

  How much must mary include in income

Mary's actual hospital costs were $66500 and her therapy cost $7000. How much must Mary include in income

  Complete phillip and claire dunphy

Complete Phillip and Claire Dunphy's 2013 federal income tax return.

  Determine the number of units that were transferred

Alpha completed and transferred $119,000 of production to finished goods inventory for the month of March. Determine the number of units that were transferred

  Manufacturing cost data for sassafras company which uses a

job order cost flowquestion detailsmanufacturing cost data for sassafras company which uses a job order cost system are

  How much must you deposit in an account today

How much must you deposit in an account today if you want to pay yourself $230 at the end of each of the next 15 years

  Prepare journal entries for each of the transactions

Prepare journal entries for each of the following transactions for ABL Ltd that started operations in September 2019

  What is the purpose of information presented in the notes

Changing the method of inventory valuation should be reported in the financial statements because of which qualitative characteristic

  The difference between gross and net take home pay

Define and discuss the following: Estimated and contingent liabilities and The difference between gross and net take home pay

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd