Question
$2Suppose an FI hold a $2 000 000 trading portfolio with an average beta of 1.0. Over the last year, the daily return on the
$2Suppose an FI hold a $2 000 000 trading portfolio with an average beta of 1.0. Over the last year, the daily return on the stock market index was 3%. How much does the FI stands to lose in earnings if adverse stock market returns materialize tomorrow?
A. $2000000 x 0.03 = 60000
B. $2000000 x 1.0 x 0.03 = 60000
C. $2000000 x 1.65 x 0.03 = 99000
D. $2000000 x 2.33 x 0.03 = 139800
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
13th edition
1111971633, 978-1111971632
