DV = b₀ + b₁DF + e

where V is the weekly change in the value of your equity portfolio and F is the weekly change in the value of one S&P 500 futures contract. The regression results indicate that the estimate of 0 is 162.4, the estimate of 1 is 220.9, and the R 2 is 0.03.

A.Based on the regression results, how many S&P 500 futures contracts should you trade in order to optimally hedge your portfolio? Answer: __________________

B.Based on the regression results, should you buy or sell S&P 500 futures contracts in order to optimally hedge your portfolio? Answer: __________________

C.After you optimally hedge using S&P 500 futures contracts, would your portfolio have much risk? (Please just answer yes or no.) Answer: __________________