Assume you have AUD500,000 invested in an equal-weighted portfolio on April 1, 2022 for 3 months. The portfolio will comprise four Australian stocks: NCM, NST, EVN and PRU all of which are from the gold exploration and production sector. Identify a major risk in your portfolio of stocks to hedge with an appropriate futures contracts. (5 marks)

Assessment criteria: o Identification of major risk o Methodology for identification of major risk. o Rationale for selection of futures contract for hedging.