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An equity fund manager has a portfolio of stocks worth USD 170 million. The beta of...

An equity fund manager has a portfolio of stocks worth USD 170 million. The beta of the portfolio is 1.0. In early July, the fund manager would like to use September futures contract on the S&P 500 to change the beta of the portfolio to 2.0. The index futures price is 1,000 and each contract is on USD 250 times the index.

Which of the following statements is most accurate?

Group of answer choices

The fund manager needs to long 300 index futures contracts.

The fund manager needs to long 120 index futures contracts.

The increase of portfolio beta will increase market risk exposure.

The fund manager needs to short 680 index futures contracts.

On April 10, crude oil's spot price was $33 and its August futures price was $35. On July 1 the spot price is $64 and the August futures price is $61.50. An oil company entered into futures contracts on April 10 to hedge its oil selling transaction on July 1. It closed out its position on July 1.

Which of the following statements is least accurate?

Group of answer choices

The effective price (after taking account of hedging) received by the company is $26.5.

The effective price (after taking account of hedging) paid by the company is $61.50.

The company has loss on its futures position.

The company entered a long hedge.

The current spot price of silver is USD 15 per ounce. The storage costs are USD 0.24 per ounce per year payable quarterly in advance. Assuming that risk-free interest rate is 10% per annum (continuous compounded), what is the per ounce futures price of silver in USD for the delivery in nine months.

Group of answer choices

16.42

15.42

16.36

15.36

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