What are the three basic approaches to enhanced indexing

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Reference no: EM131279732

1. How can an investor use listed options to protect an equity portfolio from price risk?

2. How can stock index futures be used to create a synthetic index fund?

3. a. Explain what an optimal hedge ratio is for portfolio hedging when the index and the futures contracts have the same volatility.

b. Explain why it is referred to as a minimum hedge ratio.

4. Explain how an investor can use an equity swap structure to reduce domestic equity exposure on a $100 million portfolio from 75% to 70% while increasing bond exposure from 25% to 30%.

5. What are the three basic approaches to enhanced indexing?

Reference no: EM131279732

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