An equity investor holds a stock portfolio worth 10,000,000. The correlation coefficient between the returns of the portfolio and the FTSE 100 index is 0.8, the standard deviation of the portfolio returns is 0.45, whereas the standard deviation of the index returns is 0.25. Assume that the current level of the index is 6,300 and that a futures contract on the stock index is traded. The contract is worth 10 times the level of the index. Assume that the delivery date of the contract is 18 months from now, which coincides with your hedging horizon and the continuously compounded interest rate is 5% per year. Construct the minimum variance hedge of the investor's stock portfolio using the stock index futures. Provide two calculations: without and with taking into account the effects of marking to market. An equity investor holds a stock portfolio worth 10,000,000. The correlation coefficient between the returns of the portfolio and the FTSE 100 index is 0.8, the standard deviation of the portfolio returns is 0.45, whereas the standard deviation of the index returns is 0.25. Assume that the current level of the index is 6,300 and that a futures contract on the stock index is traded. The contract is worth 10 times the level of the index. Assume that the delivery date of the contract is 18 months from now, which coincides with your hedging horizon and the continuously compounded interest rate is 5% per year. Construct the minimum variance hedge of the investor's stock portfolio using the stock index futures. Provide two calculations: without and with taking into account the effects of marking to market