You currently hold 25,000 shares of XYZ stock. The stock is currently trading at $68.00 per share.
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You currently hold 25,000 shares of XYZ stock. The stock is currently trading at $68.00 per share.
You are interested in hedging against short-term movements in the market and decide to use E-Mini S&P 500 futures to hedge your exposure. The Index is currently at 4025. Contract size = $50 times the index. The beta of the stock is 1.18. Calculate how many E-mini S&P 500 futures contracts are needed to hedge the portfolio against downside price risk. Indicate if you need to go long or short to hedge your exposure.
Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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