An investment management firm wishes to increase the beta for one of his porfolios under management from 0.95 to 1.20 for a three month period. The portfolio has a market value of $175m. The investment firm plans to use a futures contract priced at $105,790 in order to adjust the portfolio beta. the futures contract has a beta of 0.98. At the end of the three months, the overall equity market is up 5.5%. The stock portfolio under management is up 5.1%. THe future contract is priced at $111,500. Calculate the value of overall position and the effective beta of the portfolio. The answer calculate Beta as the rate of return of the portfolio/rate of return of the market. What is the basis for this??? Rp=Rf+beta(Rm-Rf), beta=(Rp-Rf)/(Rm-Rf) NOT Rp/Rf