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2. A company has $1500 million portfolio with a beta of 1.25. It would like to use futures contracts on the S&P500 to hedge its

2. A company has $1500 million portfolio with a beta of 1.25. It would like to use futures contracts on the S&P500 to hedge its risk. The index futures price is currently 2250, and each contract is for delivery of $250 times the index. A) What is the hedge that minimizes risk? B) What should the company do if it wants to decrease the beta of the portfolio to 1.15?

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