Currently the beta of a stock fund is 12 suppose the fund


Suppose a company is going to borrow $10 million for 3 months beginning June 2016. The company wants to lock in the borrowing rate today. Which action should the company undertake?

a. Buy 1 June 2016 Eurodollar futures contract
b. Short 1 June 2016 Eurodollar futures contract
c. Buy 1 September 2016 Eurodollar futures contract
d. Short 1 September 2016 Eurodollar futures contract
e. Buy 10 June 2016 Eurodollar futures contracts
f. Short 10 June 2016 Eurodollar futures contracts

g. Buy 10 September 2016 Eurodollar futures contracts

h.Short 10 September 2016 Eurodollar futures contracts

Currently, the beta of a stock fund is 1.2. Suppose the fund manager wants to reduce the beta of this portfolio. Which is an effective way to achieve such goal?

a.Short stock index futures
b. Long stock index futures
c. Buy more stocks
d. Short Eurodollar futures

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Finance Basics: Currently the beta of a stock fund is 12 suppose the fund
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