What position should the company take

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Question - It is July 16. A company has a portfolio of stocks worth $100 million. The beta of the portfolio is 1.2. The company would like to use the December futures contract on a stock index to change beta of the portfolio to 0.5 during the period July 16 to November 16. The index is currently 1,000, and each contract is on $250 times the index. What position should the company take?

a. Long 140 contracts

b. Short 320 contracts

c. Short 280 contracts

d. Long 260 contracts

Reference no: EM132939454

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