John q. investor manages an equity portfolio with a market value of $3,000,000. the portfolio beta is 1.6. john q. finds this somewhat overly aggressive for the client's risk profile and sells 25 djia futures contracts. the contract is defined as $10 times index and is currently trading at 15379. john q. anticipates that this hedge will reduce the portfolio beta to

Rate of return douglas keel, a financial analyst for orange industries, wishes to estimate the rate of return for two similar-risk investments, x and y. douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. a year earlier, investment x had a market value of $27 comma 000; and investment y had a market value of $46 comma 000. during the year, investment x generated cash flow of $2 comma 025 and investment y generated cash flow of $ 6 comma 770. the current market values of investments x and y are $28 comma 582 and $46 comma 000, respectively. a. calculate the expected rate of return on investments x and y using the most recent year's data. b. assuming that the two investments are equally risky, which one should douglas recommend? why?