Answer Q 4 Only

Q1. On Friday, April 3, 2020 JD bought shares of the following stocks and held this portfolio for a year: Con 1.1 Based on the total change in the portfolio value. 1.2 Based on the weighted average of the one-year rate of returns of the individual stocks in the portfolio. Q2. Use the data in Q1. to calculate the Beta of JD's portfolio on 4, 3, 2020. Q3. When JD bought the given portfolio she decided to hedge its value for one year in case the market will fall durng the year. JD used the S\&P500 index futures (on CME) employing the minimum variance hedge ratio. The contract's dollar multiplier was $250 and the futures value was: F4,3,20,3,011=2,912.43. When JD closed the futures position on 4,2,21 the futures value was F4,2,21,,n01=3,972,84. Using a complete time table show the entire hedge and describe the result of the hedge on 04.2.21. Q4. Suppose now that instead of the hedge that JD opened on 4.3.2020 she timed the market and speculated that the market trend is up. JD used the same data in Q3 to increase the beta of her portfolio by 4 points. I.e., Beta(Target) = Current portfolio Beta +4. Use the S\&P500 index futures to increase the beta of the JD's portfolio by 4 points and describe the result of this strategy a year later when JD closed her speculative position on 4. 2. 2021