1. A company has a 40 million portfolio with a beta of 1.2. The Euros to xx50 is currently trading at 3442 index points and the multiplier is 50 times the index. The risk free interest rate is equal to 2% and the dividend yield is 2,41%. a) How can the company use futures contracts on the S&P 500 to completely hedge its risk over the next 6 months ? b) What position should it take to reduce the beta of the portfolio to 0.6 ? c) Suppose that the fund manager now expect a rise in the market and he wants to use futures contract to increase the beta to 2.0. What should the fund manager do?