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Boeing has a $36 million portfolio with a beta of 1.2. The futures price for a contract on an index is $900. Futures contracts on
Boeing has a $36 million portfolio with a beta of 1.2. The futures price for a contract on an index is $900. Futures contracts on $250 times the index can be traded.(Show Work)
| Portfolio | Beta | Futures Price Contract on an Index | |
| Boeing | $36,000,000 | 1.20 | $900 ($250 times the index can be traded) |
What trade is necessary to reduce beta to 0.9 (long or short and how many contracts are needed)?
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