Assume that you are managing an equity portfolio worth $5,000,000, and you are considering hedging your portfolio over the next three months. The hedging instrument is the S&P 500 index futures which matures in four months. The contract has been written on $250 times the index. Right now, the index is 1990, while the S&P futures price is 1980. Your portfolio has a beta value of 0.85. The risk-free rate of interest is 2%, and the dividend yield on index is 2% per annum. Discuss your hedge strategy and compute the expected value of your hedged portfolio, assuming that the index falls to 1850 in 3 months and the futures price is 1815.