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How many contracts should buy or sell to hedge position

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Reference no: EM132594711

You are given the following information about a portfolio you are to manage. For the long term, you are bullish, but you think the market may fall over the next month.

Portfolio Value: $1M

Portfolio's Beta: .60

Current S&P500 Value: 1400

Anticipated S&P500 Value: 1200

Question 1: How many contracts should you buy or sell to hedge your position? Allow fractions of contracts in your answer.

A. buy 1.714

B. sell 1.714

C. sell 4.236

D. sell 11.235

E. buy 4.236

Reference no: EM132594711

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