A company has $20 million portfolio with beta of 0.8. It would like to use futures contracts on the S&P 500 to hedge its risk. The index is currently standing at 1050, and each contract is for delivery of $250 per index points. What is the hedge that minimises its risk? What should the company do if it wants to reduce the beta of the portfolio to 0.2?

a. Selling 61 futures contracts minimises the risk. To reduce the beta to 0.2, the company should instead sell 46 contracts.

b. Buying 61 futures contracts minimises the risk. To reduce the beta to 0.2, the company should instead buy 46 contracts.

c. Buying 76 futures contracts minimises the risk. To reduce the beta to 0.2, the company should instead buy 61 contracts.

d. Selling 76 futures contracts minimises the risk. To reduce the beta to 0.2, the company should instead sell 61 contracts.