### Hedge the systematic risk in its portfolio

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##### Reference no: EM131213921

Modern Portfolio Managers (MPM) hold a 19 million dollar portfolio of stocks with a beta of 1.25 measured with respect to the S&P 400 index. The current value of the index is 955 and the current value of a futures contract on the index is 1018.0. The multiplier on the futures equals \$250. If MPM wishes to hedge the systematic risk in its portfolio, how many contracts must it buy or sell?

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