Business, 11.12.2019 17:31 Jojoahmed99
You manage a $13.5 million portfolio, currently all invested in equities, and has a beta of 1.2. you believe that the market is on the verge of a big but short-lived downturn; you would move your portfolio temporarily into t-bills, but you do not want to incur the transaction costs of liquidating and reestablishing your equity position. instead, you decide to temporarily hedge your equity holding with s& p 500 index futures contracts. 1) should you be long or short the contracts? why? 2) how many contracts should you enter into? the s& p 500 index futures price is now at 1286 and the contract multiplier is $250. 3) suppose instead of reducing your portfolio beta all the way down to zero, you decide to reduce it to 0.5, how many index futures contracts should you enter into?
Answers: 3
Business, 22.06.2019 13:10
A4-year project has an annual operating cash flow of $59,000. at the beginning of the project, $5,000 in net working capital was required, which will be recovered at the end of the project. the firm also spent $23,900 on equipment to start the project. this equipment will have a book value of $5,260 at the end of the project, but can be sold for $6,120. the tax rate is 35 percent. what is the year 4 cash flow?
Answers: 2
Business, 22.06.2019 22:00
Acompany's sales in year 1 were $300,000, year 2 were $351,000, and year 3 were $400,000. using year 2 as a base year, the sales percent for year 3 is
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Business, 23.06.2019 02:00
Which of the following describes a situation of scarcity? a. someone offers free advice about getting into college. b. someone distributes free bottles of water at the beach. c. a child charges friends for a ride on his new bike. d. a person lets the kids in the neighborhood use his pool.
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Business, 23.06.2019 02:00
What percentage of hard rock's profit is derived from retail shop sales?
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You manage a $13.5 million portfolio, currently all invested in equities, and has a beta of 1.2. you...
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