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(26) (Stock Hedging) A company has a $ 5 million portfolio with a Beta of 1.5, and it will hedge with S&P 500 futures. The

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(26) (Stock Hedging) A company has a $ 5 million portfolio with a Beta of 1.5, and it will hedge with S&P 500 futures. The index Futures is currently at 2000, and each contract is for delivery of 250 index units. (a) What is the optimal # of Contracts to "fully hedge risk AND say LONG or SHORT ? (b) Given your (a) answer, if they want to end up with a Beta of 0.75 for their overall position, how many contracts should they use

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