3. In October, a portfolio manager for an insurance fund has a stock portfolio of $900 million with a portfolio beta of 1.25. He plans on selling the stocks in the portfolio in December to be able to pay out funds to policyholders for annuities, and is worried about a fall in the stock market. Currently, the CME S&P 500 index is 2,018.05 and for a December futures contract is 2,009.40 ($250 multiplier for the contract). a. What type of futures position should be taken to hedge against the stock market going down and how many future contracts are needed for this hedge? [Hint: # contracts = [Amount Hedged / Futures Index Price x Multiplier] x Beta Portfolio Type of Position _____________ Explain why this Position?________________________________________ # of Contracts____________ (be sure to keep contracts as a whole number, round up if >_ 0.50); round down if less than 0.50