You manage a $13.5 million portfolio, currently all invested in equities, and has a beta of 1.2. you believe that the market is on the verge of a big but short-lived downturn; you would move your portfolio temporarily into t-bills, but you do not want to incur the transaction costs of liquidating and reestablishing your equity position. instead, you decide to temporarily hedge your equity holding with s& p 500 index futures contracts. 1) should you be long or short the contracts? why? 2) how many contracts should you enter into? the s& p 500 index futures price is now at 1286 and the contract multiplier is $250. 3) suppose instead of reducing your portfolio beta all the way down to zero, you decide to reduce it to 0.5, how many index futures contracts should you enter into?

Which of the following differentiates cost accounting and financial accounting? a. the primary users of cost accounting are the investors, whereas the primary users of financial accounting are the managers. b. cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions. c. cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties. d. cost accounting deals with product design, production, and marketing strategies, whereas financial accounting deals mainly with pricing of the products.