$13.$ You are holding a $500,000,000$ portfolio on September $7$th $2012$ and are worried that it may lose value if the British Pound depreciates.

a$.$ State whether you should take a long or a short position in British Pound futures.

b$.$ Determine the optimal number of British Pound futures contracts that you need based on the hedge ratio found in exercise $1$ and the fact th the standard size of any British Pound futures contract is

c$.$ Repeat part b with the "tailing the hedge" ajustment.

$62,500$

Assume the hedge ratio $h$ is now

$0\mathrm{.}948042$