31. Correct Option: A Loss of $2.8 million The hedge trade to neutralize beta is to short 2.0 beta * (1,000,000 * $80)/(250 * 1300) =492 contracts. The expected return of the s&P index, since its beta is assumed to be 1.0, is given by E(r) = 3% + 1.0*4%= 7% per annum.
31. Correct Option: A
Loss of $2.8 million The hedge trade to neutralize beta is to short 2.0 beta * (1,000,000 * $80)/(250 * 1300) =492 contracts.
The expected return of the s&P index, since its beta is assumed to be 1.0, is given by E(r) = 3% + 1.0*4%= 7% per annum.
Interest rate
31. Correct Option: A Loss of $2.8 million The hedge trade to neutralize beta is to short 2.0 beta * (1,000,000 * $80)/(250 * 1300) =492 contracts. The expected return of the s&P index, since its beta is assumed to be 1.0, is given by E(r) = 3% + 1.0*4%= 7% per annum.
31. Correct Option: A
See lessLoss of $2.8 million The hedge trade to neutralize beta is to short 2.0 beta * (1,000,000 * $80)/(250 * 1300) =492 contracts.
The expected return of the s&P index, since its beta is assumed to be 1.0, is given by E(r) = 3% + 1.0*4%= 7% per annum.
Measuring credit risk
Any idea as to when the class will be comducted? I tried solving the sums I have a few doubts.
Any idea as to when the class will be comducted? I tried solving the sums I have a few doubts.
See lessMeasuring financial risk
The answer is A 9.25.
The answer is A 9.25.
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Thank you so much
Thank you so much
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Option B is the correct answer
Option B is the correct answer
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Yes. That’s my doubt
Yes. That’s my doubt
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