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# stock market declines, portfolio return, business contracts, business law, portfolio, dividends

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If the S&P contracts have a multiplier of \$500 and your \$2.0M hedge fund stock portfolio has a beta of 1.2, then your portfolio position can be hedged from overall stock market volatility for 3 months by selling how many S&P futures contracts beginning of the quarter?  Assume the S&P index is at 1,200 and for simplicity, your portfolio pays no dividends.

Assume if your portfolio alpha is 4%. What would be your portfolio return if the stock market declines by 10% during the quarter? Explain your answer.

#### Solution Preview

Please see the attached file(s) for the complete tutorial
Anna, 108710

Problem: Assume if your portfolio alpha is 4%. What would be your portfolio return if the stock market declines by 10% during the quarter?

Question 2
Formula:
[\$2,000,000/(1,200 x \$500)] x 1.20 = 4 ...

#### Solution Summary

The following posting helps problems regarding stock market declines and portfolio returns. Step by step calculations are given for each problem.

\$2.19