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1. Suppose that a portfolio is worth $600 million. The beta of the portfolio is 1.5. The portfolio manager would like to use the CME

1. Suppose that a portfolio is worth $600 million. The beta of the portfolio is 1.5. The portfolio manager would like to use the CME December futures contract on the S&P 500 to change the beta of the portfolio to 0.5. The index is currently 2,400, and each contract is $250 times the index. What is the future position required to reach this goal? Long or short? How many contracts?

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