What the expectation about the market underpinning

Assignment Help Financial Accounting
Reference no: EM132920563

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

Questions Cloud

What might be examples of decision that may lead to transfer : Managers, when pursuing the objective of maximising, What might be two examples of decisions that may lead to a transfer of wealth from lenders to shareholders.
Which american options can be valued using binomial tree by : Which American options can be valued using a binomial tree by? checking whether early exercise is optimal at all nodes where the option is in the money
Use a two-step tree to value a european put option : The current price of a non-dividend paying stock is $30. Use a two-step tree to value a European put option on the stock with a strike price of $32.
Calculate the balance in the retained earnings account : Kay Corporation reported a net income of $203,670 for 2020. Calculate the balance in the retained earnings account at December 31, 2020
What the expectation about the market underpinning : What the expectation about the market underpinning the adjustment of beta and the number of futures contracts the manager should take are
Find what is the balance of margin account at the end of day : Find What is the balance of margin account at the end of the day? You sell one December futures contract when the futures price is $1,010 per unit.
Find how much income does david have to recognize : How much income does David have to recognize? David purchased a TV from his employer. The regular price on the TV is $1,000 and the profit margin on the TV.
What is the expected dollar profit from speculation : Assume that you would like to trade £4,000,000 in the forward market. What is the expected dollar profit from speculation
What working paper entry to consolidate financial statements : What working paper entry to consolidate the financial statements of P and S on December 31, 2012 will include? P Company sold a warehouse with a book value

Reviews

Write a Review

Financial Accounting Questions & Answers

  Estimate bad debt expense under percentage of credit sales

At December 31, 2009, Garner has a $1,000 credit balance in its allowance for doubtful accounts. Estimate the bad debt expense under the percentage of credit sales method.

  The capital projects fund was terminated

The unjustified portion of the grant was refunded to the state the remaining cash was transferred to the General Fund, and the Capital Projects Fund was terminated

  Provide an overview of your start-up company

Analyze two sources that might be available to provide venture capital for your start-up. Compare and contrast the major advantages and disadvantages .

  What the amount of cost of goods available for sale

What the amount of cost of goods available for sale during the year depends on the amounts of? beginning merchandise inventory and net purchases.

  What is the face value of the new debt

If you instead issued debt that is more senior than the current debt to finance the new investment, what is the face value of the new debt?

  Wages and salaries in planning budget

Oscarson Midwifery's cost formula for its wages and salaries is $3,200 per month plus $460 per birth. For the month of September, the company planned for activity of 163 births, but the actual level of activity was 150 births. The actual wages and sa..

  Method of amortization of bond discount

If the corporation uses the straight -line method of amortization of bond discount,the amount of bond intrest expense to be recognized on July 1,2010 is ?

  How do journal for chico company allows customers

How do journal for Chico company allows its customers to return merchandise in 30 days of purchase.?a few days later on January 3

  Direct materials and beginning or ending work in progress

Backflush costing and JIT production. The Grand Meter Corporation manufactures electrical meters. For August, there were no beginning inventories of direct materials and no beginning or ending work in progress. Grand Meter uses a JIT production syste..

  What is the stock expected price fourteen years from today

The dividends are expected to increase by 4% each year. The required rate of return on the stock is 14%. What is the stock's expected price 14 years from today

  Compute what is the break-even point in dollar sales

Compute What is the break-even point in dollar sales? The variable cost per unit is $21.28, Poseidon Swim has average fixed costs per year of $45,519.

  Crane mechanics acquired 75 percent of downey enterprises

crane mechanics acquired 75 percent of downey enterprises on march 31 2005 for 3645000.downeys book value at that date

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd