Mr. X, an investor buys the stocks of WBL Limited worth - 21,60,000 due to very strong fundamentals. Since last 3 months, the market sentiment is…
CA Final · Advanced Financial Management · MTP · May 2026
Mr. X, an investor buys the stocks of WBL Limited worth - 21,60,000 due to very strong fundamentals. Since last 3 months, the market sentiment is weak and witnessed a significant volatility and considered to remain weak for about the next three months. Keeping in the mind volatility in the market, Mr. X is planning to hedge his portfolio in the future market. The Beta of WBL stock is 1.3 and the current value of NIFTY is 2250 and 3 months future is selling at 2310. The current market price of the WBL stock is 240. Each Nifty future can be trade in units of 240 only. Assume there is no transaction cost and M to M Margin. From the information given above, choose the correct answer to the following questions:
Suggested Answer and Working Notes:
Correct Answer: Option (B)
Sell 5 future contracts
Topics: Portfolio Management
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