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Mr. Lee has a portfolio of stock valued at RM900,000. He would like to protect against an anticipated market decline. i. Suggest and explain a

Mr. Lee has a portfolio of stock valued at RM900,000. He would like to protect against an anticipated market decline.i. Suggest and explain a solution to Mr. Leeii. Mr. Lee anticipated that the market will decline 10%. Assume FBM KLCI stock index future priced at 1,800. Explain how stock index future able to hedge against the market decline.

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i One solution to protect against an anticipated market decline for Mr Lee is to use a hedging strategy called short selling This involves selling a p... blur-text-image

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