[20 Points] Alex Andrew, who manages a $95 million large-capitalization U.S. equity portfolio, currently forecasts that equity markets will decline soon. Andrew prefers to avoid the transaction costs of making sales but wants to hedge $15 million of the portfolio's current value using S\&P 500 futures. Because Andrew realizes that his portfolio will not track the S\&P 500 Index exactly, he performs a regression analysis on his actual portfolio returns versus the S\&P futures re- turns over the past year. The regression analysis indicates a risk-minimizing beta of 0.88 with an R2 of 0.92. a. [10 Points] Calculate the number of futures contracts required to hedge $15 million of Andrew's portfolio, using the data shown. State whether the hedge is long or short. Show all calculations. b. [10 Points] Identify two alternative methods (other than selling securities from the portfolio or using futures) that replicate the strategy in Part a. Contract each of these methods with the futures strategy