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What strategy should the investor follow

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Question - As of July 1, the investor owns 50,000 shares. The market price of each share is $ 30. The investor is interested in hedging against market movements over the next month and has decided to use a index index futures contract. The price of the index futures is currently 1,500, and one contract is a contract to deliver $ 50 from the index. Stock beta 1.3. What strategy should the investor follow? Under what conditions would it be useful?

Reference no: EM132797932

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