3. Assume that you manage an equity portfolio. The portfolio betals 1.15. You anticipate a decline in equity values and wish to hedge $500 million of the portfolio Calculate the number of contracts you would need to hedge your position and indicate whether you would go short or long. Assume that the price of the S&P 500 futures contract is 1105 and the multiplier is 250. 4. The WallMal Company has entered into a 4-year interest rate swap, with semiannual settlement to pay afwed rate of 8% per year and receive -month LIBOR. The notional principal is $50,000,000. Assume that one year later the fixed rate on a new 3-year receive fixed pay floating LIBOR swap has fallen to 7% per year. Settlement is on a semiannual basis. Calculate the market value of the FRN based on $100 face value