Futures

Ram buys 10,000 shares of X Ltd. at a price of ₹ 22 per share whose beta value is 1.5 and sells 5,000 shares of A Ltd. at a price of ₹ 40 per share having a beta value of 2. He obtains a complete hedge by Nifty futures at ₹ 1,000 each. He closes out his position at the closing price of the next day when the share of X Ltd. dropped by 2%, share of A Ltd. appreciated by 3% and Nifty futures dropped by 1.5%. What is the overall profit/loss to Ram? In this Qn, there is no information about his position on NIFTY futures, Can we solve it assuming he took short position as Nifty futures dropped by 1.5% unlike the class material where we took long position resulting in loss?

Durai Murugan

CA Final

★ 470

07-Jan-25 01:36

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