What are the number of contracts needed to implement hedge

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Reference no: EM13936407

You have a $500 million long portfolio in Stock 1 that has a current price of $55 per share, the risk-free interest rate is 2 percent, and there are no dividends. The size of each three-month futures contract is 250 shares. The current price of Stock 2 is $45 and at time T it is $43.9 per share. What are the number of contracts needed to implement this hedge?

Reference no: EM13936407

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