What position should the manager take

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Reference no: EM131841962

Currently, a mutual fund manager wishes to hedge a portfolio that has a market value of $6,250,000 over the next three months using the S&P500 index futures with six months to maturity. The beta of the mutual fund portfolio is 1.50. The index futures price is 2,500. One index futures contract is on $250 times the index level. Please answer the following questions:

What position (long or short) should the manager take? Please explain.

Reference no: EM131841962

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