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An investor has a $18 mln portfolio with a beta of 1.15. They would like to use Dow Jones Industrial Average futures Big DOW DJIA

An investor has a $18 mln portfolio with a beta of 1.15. They would like to use Dow Jones Industrial Average futures Big DOW DJIA (x$25) Futures to hedge its risk. The DJIA futures is currently standing at 29 600, and each contract is for delivery of $25 times the index. What is the hedge that minimizes risk?

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