9. Suppose that the relationship between the rate of return on IBM stock, the market index, and a computer industry index can be described by the following regression equation: Industry . If a futures contract on the computer industry is traded, how would you hedge theexposure to the systematic and industry factors affecting the performance of IBM stock? How many dollars’ worth of the market and industry index contracts would you buy or sell for each dollar held in IBM?

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IBM = .5M+