question 15 to 19

b. $2 C. $1 d. $6 e. None of the above For the next 5 questions. Suppose the beta of your international stock portfolio, currently valued at $50 million, is 1.3. You decide to hedge the downside risk of this portfolio with a SHORT position in S&P 500 futures contract, currently priced at 1,300 (note that the dollar price of this contract = 1,300 x $250 = $325,000) 15. Calculate the hedge ratio (.e. number of futures contracts to sell). a. 154 5 b. 200 C. 50,000 d. None of the above 16. Suppose the market declines by 10% at the time of hedge lifting. This outcome will result in a: a. Loss in the futures position but a gain in the stock portfolio b. Gain in the stock portfolio as well as a gain in the futures position C. Loss in the stock portfolio as well as loss in the futures position d. Loss in the stock portfolio but a gain in the futures position e. None of the above statements is correct 17. Suppose the market declines by 10% at the time of hedge lifting. Calculate your gain or loss on your futures position a. Gain of $6,500,000 b. Loss of $6,500,000 C. Gain of $56,500,000 d. Loss of $45,000,000 e. Loss of $5,000,000 f. None of the above 18. Suppose the market declines by 10% at the time of hedge lifting. Calculate your gain or loss on your stock portfolio a Gain of $6,500,000 b. Loss of $6,500,000 c. Gain of $56,500,000 d. Loss of 545,000,000 Loss of $5,000,000 f. None of the above 19. Suppose the market dedines by 10% at the time of hedge lifting Calculate your Banos xerall position and comment on the effectiveness of ihe hedge derhede