A company has a $36 million equity portfolio with a beta of 0.9. The futures price on the S&P index for a contract delivering in 6 months is currently trading at 900. Futures contracts on $250 times the index can be traded. What trade is necessary to increase the beta to 1.2 over the next 4 months?Group of answer choicesShort 48 futures contracts and close out the position in 4 monthsShort 48 futures contracts and close out the position in 6 monthsShort 192 futures contracts and close out the position in 6 monthsLong 48 futures contracts and close out the position in 4 monthsLong 48 futures contracts and close out the position in 6 months

A company has a $36 million equity portfolio with a beta of 0.9. The futures price on the S&P index for a contract delivering in 6 months is currently trading at 900. Futures contracts on $250 times the index can be traded. What trade is necessary to increase the beta to 1.2 over the next 4 months?Group of answer choicesShort 48 futures contracts and close out the position in 4 monthsShort 48 futures contracts and close out the position in 6 monthsShort 192 futures contracts and close out the position in 6 monthsLong 48 futures contracts and close out the position in 4 monthsLong 48 futures contracts and close out the position in 6 months

A company has a $36 million portfolio with a beta of 1.2. The futures price for a contract on an index is 900. Futures contracts on $250 times the index can be traded. What trade is necessary to reduce beta to 0.9? A. Short 48 contracts B. Long 192 contracts C. Long 48 contracts D. Short 192 contracts

A firm has an operating profit of $120 million, pays interest of $20 million, and pays corporate tax at 30%. All cash flows will grow by 3% per year in perpetuity. The firm’s equity beta is 1.0, the market risk premium is 6% and the risk-free rate is 5%. What is the value of equity assuming no reinvestment needs and no depreciation?A.$909 millionB.$875 millionC.$1,250 millionD.$636 million

You invest $600 in a security with a beta of 1.2 and $400 in another security with a beta of 0.90. The beta of the resulting portfolio is a. 1.04b. 1c. 0.98d. 1.70

Given: risk-free rate of return = 5 % market return = 10%, cost of equity = 15% value of beta (β) is:a.1.9b.1.8c.2.0d.2.2