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i need help 3 -A person wants to invest $1,000,000 in the SP500 and is thinking if entering into a futures contract simultaneously would be
i need help
3 -A person wants to invest $1,000,000 in the SP500 and is thinking if entering into a futures contract simultaneously would be beneficial. The idea is to invest until June and then liquidate the investment. The SP500 index is 2865.45 today and it can go up or down by one standard deviation. The standard deviation of the SP500 is 10.65% and the probability of the SP500 decreasing in value is 60%. The settlement price for the SP500 futures maturing in June is 2837.8 Should the investor enter into a future contract along with investing in the S answer, calculate the average and the standard deviation of the alternatives P500? As part of the Step by Step Solution
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