2. In this problem you will use SP500 index futures to hedge against risks in your stock portfolio. Note that SP500 index is given by $250 times the futures price. We have the following information SP500 spot price Vap500,1000 VAI Value of your portfolio = 5.05M Rf = 4% Dividend = 1% = 1.5 Beta F1 -1010 a). This is a cross hedge, how much contract should you short? Each SP500 index futures contract needs to be multiplied by 250. b). If the SP500 index is 900 in 3 month and F2-902, Do you have a gain or loss or your overall position? Show steps of your calculation (10 points)