You manage a stock portfolio worth $$54$ million with a beta of $1\mathrm{.}7.$ You want to hedge the risk of a stock market downturn by using S&P $500$ index futures contracts with a contract multiplier of $250.$ The current level of the S&P $500$ index is $2,990.$

$$ How many S&P $500$ index futures contracts do you need to trade to increase the beta of the portfolio from $1\mathrm{.}7$ to $2\mathrm{.}6($rounded to the nearest integer$)?$ 

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To hedge the risk of a stock market downturn and increase the beta of the portfolio from 17 to 26 we ... View the full answer