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What the expectation about the market underpinning

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Problem 1: A portfolio manager decides to adjust the beta of his $139662 equity portfolio from 0.6 to 1.5 for the next five months. The manager selects a future on the market index, which is currently traded at $213, to adjust the beta of his equity portfolio. The expectation about the market underpinning the adjustment of beta and the number of futures contracts the manager should take are:

a. The market will be moving down and a short position in 393 futures contracts should be held
b. The market will be moving down, and a long position in 984 futures contracts should be held
c. The market will be moving up, and a long position in 590 futures contracts should be held
d. None of the other answers provided is the best or correct answer
e. The market will be moving up, and a short position in 590 futures contracts should be held

Reference no: EM132920563

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