How many futures contracts you would trade

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You hold a well-diversified equity portfolio with a beta of 1.5. You want to reduce the beta of the portfolio to 1. You plan to do so using S&P 500 futures. The value of the portfolio is 5 million. The value of the S&P 500 is 2,600 and the futures contract is on $250 times the index. Explain how you would proceed and how many futures contracts you would trade.

Reference no: EM132293065

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