2. Archer Daniels Midland decides to short 5 wheat futures contracts with each contract covering 5,000 bushels of wheat for 283 cents per bushel in order to hedge its operations. The initial margin is $7,200 per contract and the maintenance margin is $5,400 per contract. What price change would lead to a margin call? Under what circumstances could $2,850 be withdrawn from the margin account? Hedging Strategies using Futures: 3. A franchised restaurant company has an investment portfolio that is managed primarily for the benefit of the owners as it is a closely held organization. The portfolio consists of stocks and bonds worth approximately $88,950,000. After a degree of financial analysis, it is determined that the portfolio's beta is.965 for which the owners would like to use the CME August S&P 500 futures contract to lower the beta of the portfolio to 0.77 during the period to the expiration of the contract in August. Each contract on the S&P 500 covers an amount of money equaling $250 times the index which is currently 1,768. a) Describe what the company should do to reduce the beta of the portfolio? b) The owners interpret information from the Fed to be bullish for the financial markets generally. As such, they decide to alter the strategy and go in a completely different direction; now they want to increase the beta of the investment portfolio to 1.425. What strategy should be taken in futures contracts to bring about the newly desired beta of the investment portfolio