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Business, 05.05.2020 06:18 allieballey0727

Now suppose that the manager misestimates the beta of Waterworks stock, believing it to be 0.75 instead of 0.95. The standard deviation of the monthly market rate of return is 9%. If he holds a $2,000,000 portfolio of Waterworks stock. The S&P 500 currently is at 2,000 and the contract multiplier is $50. a. What is the standard deviation of the (now improperly) hedged portfolio?

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