An investor expects Company DEF to significantly underperform the market due to poor management. The investor shorts 27,861 shares. Each share is currently worth $21.40. Company DEF has a beta of 1.28 measured relative to the S&P 500. The S&P 500 is currently at a value of 985. S&P 500 futures contracts are available with a contract size of 50 and a current contract price of 990.

A. Determine the appropriate position in the futures market to hedge the systematic risk associated with the short position in DEF. Your answer should be the number of contracts. Record your answer as a positive number if the investor should purchased the number of futures contracts, and record your answer as a negative number if the investor should sell the number of contracts.

B. Calculate the investor's total profit or loss that includes the profit or loss on the short position in DEF as well as the profit or loss on the futures hedge under the following scenario. The S&P 500 ends at a level of 1,372. The percentage return to Company DEF is 14.41% below what would be considered normal performance (this means that if DEF should have returned 50% based on the S&P 500 and its Beta, it would actually return 50% - 14.41%, for example). Record the investor's total profit or loss, and in one to two paragraphs, thoroughly explain the futures hedge using specifics from the question. Was the hedge successful? Why or why not?