Hi All,
I came across one problem in Advance Financial Management while reading for ICWAI Final.
In that, current Beta for portfolio of shares is 1.19.The SPOT Nifty Index is at 1350 and futures price is 1352.Question is how to reduce beta to 0.8.
Answer is, Sell index futures to reduce Beta and buy Index futures to increase Beta. Can anyone please help me in understanding, why this action is done?
CAclubindia
