Futures

price

of

S&P

500 is

2500;

Size

of

portfolio is

$5 million;

Beta

of

portfolio is

1.5. One

contract

is on $250 times the

index. What

position in futures

contracts

on the

S&P

500 is

necessary

to hedge

the

portfolio?

____________ What

position is

necessary

to reduce

the beta of the

portfolio to 0.75?

____________ W

hat position is necessary

to increase the beta of

the

portfolio to 2.0?