14. Donald Singleton is an investment banker for a regional firm. One of his clients, Dolby Manufacturing Inc., is a private company that will be making an initial public offering of 20 million shares of common stock. Mr. Singleton’s firm will buy the issue at $10 per share. He has suggested to the managing director of the firm, John Wilson, that the firm should hedge the position using stock index futures contracts.

What should Mr. Wilson’s response be?