$Q1.$

$On$ Friday, April $3,2020JD$ bought shares $of$ the following stocks and held this portfolio for a year:

$10,000$ shares $of$ IBM $(IBM)$

$20,000of$ CITIGP $(C)$

$7,500$ shares $of$ BOING $(BA)$

$15,000$ shares $of$ GENERAL MOTORS $(GM)=1\mathrm{.}15$

$10,000$ shares $of$ TEXASINSTRUMENTS $(TXN)$

betas are with the $S$&$P5001.$

Compute the one$-$year rate $of$ return $onJD\text{'}s$ portfolio:

Beta

$=1\mathrm{.}44$

$=1\mathrm{.}23$

$=1\mathrm{.}61$

$S=$$$21\mathrm{.}50$

$=1\mathrm{.}67$

Prices: $4,3,20$

$S=$$$112\mathrm{.}51,S=$$$119\mathrm{.}40$

$S=$$$41\mathrm{.}80$

$S=$$$100\mathrm{.}53$

$S=$$$212\mathrm{.}33$

$s=$$$59\mathrm{.}60$

$S=$$$94\mathrm{.}33$

prices: $4\mathrm{.}2,21$

$S=$$$63\mathrm{.}21$

$S=$$$195\mathrm{.}12$ All the

Based $on$ the total change $in$ the portfolio value.

$1\mathrm{.}2$

Based $on$ the weighted average $of$ the one$-$year rate $of$ returns $of$ the individual stocks $in$

the portfolio.

$Q2.$ Use the data $inQ1.to$ calculate the Beta $ofJD\text{'}s$ portfolio $on4,3,2020.$

$Q3.$

When $JD$ bought the given portfolio she decided $to$ hedge its value for one year $in$ case the market will fall during

the year. $JD$ used the $S$&$P500$ index futures $(on$ CME$)$ employing the minimum variance hedge ratio. The

contract's dollar multiplier was $$250$ and the futures value was: $F_{4,3,20\text{;}}$;unN$21=2,912\mathrm{.}43.$ When $JD$ closed the futures

position $on4,2,21$ the futures value was $F_{4,2,21},$ vuN$21=3,972\mathrm{.}84.$

Using a complete time table show the entire hedge and describe the result $of$ the hedge $on04\mathrm{.}2.21.$

$Q4.$ Suppose now that instead $of$ the hedge that $JD$ opened $on4\mathrm{.}3.2020$ she timed the market and speculated that the

market trend $isup.JD$ used the same data $inQ3to$ increase the beta $of$ her portfolio $***PLEASE$ ANSWER QUESTION $4***$

$by4$ points. I.$e.,$ Beta$(Target)$

$=$ Current portfolio Beta $+4.$

Use the $S$&$P500$ index futures $to$ increase the beta $of$ the $JD\text{'}s$ portfolio $by4$ points and describe the result $of$ this

strategy a year later when $JD$ closed her speculative position $on4.2,2021.$