A fund manager will be buying a new portfolio of stocks worth $1,000,000 in six months that will track S&P100 index. She is concerned that the markets may get bullish over this period. Use the information and your answers from Part (a) above to answer the following questions.

i. Which option and what position should she use to insure that the purchase cost of buying the portfolio does not go above $1,000,000 in six month time?

ii. How many contracts should she use?

iii. What would be the cost of this insurance?