You Are Given the Following Information About a Portfolio You

You are given the following information about a portfolio you are to manage. For the long-term you are bullish, but you think the market may fall over the next month. $$\begin{array} { | l | l | } \hline \text { Portfolio Value } & \$ 1 \text { million } \\\hline \text { Portfolio's Beta } & 0.60 \\\hline \text { Current S\&P500 Value } & 1400 \\\hline \text { Anticipated S\&P500 Value } & 1200 \\\hline\end{array}$$
-For a 200-point drop in the S&P500,by how much does the value of the futures position change?

A) $200,000
B) $50,000
C) $250,000
D) $500,000
E) $100,000

Correct Answer:

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