The current beta of the portfolio is 1.2 and it has a market value of $10 million. The face value of an available futures contract is $100,000. a) Set up a hedge position for the portfolio. b) Calculate and show how futures contract would be used to increase the beta of the portfolio to 2. c) Calculate and show how futures contract would be used to reduce the beta of the portfolio to 0.75

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Here are the steps to set up a hedge position for the portfolio and then adjust the beta using futures contracts Given Current beta of the portfolio 1... View the full answer