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#4) You believe that the spread between municipal bond yields and U. Treasury bond yield is going to narrow in the coming months.

#4) You believe that the spread between municipal bond yields and U.S. Treasury bond yield is going to narrow in the coming months. How can you profit from such a change suing the municipal bond and T-bond futures contracts?

#8) A manager is holding a 1 million stock portfolio with a beta of 1.25. Shoe would like to hedge the risk of the portfolio using the S&P 500 stock index futures contract. How many dollars worth of the index should she sell in the futures market to minimize the volatility of her position?

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Finance-8229978.doc

#4) You believe that the spread between municipal bond yields and U.S. Treasury bond yield is
going to narrow in the coming months. How can you profit from such a change suing the
municipal bond...

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