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Suppose the Dow Jones Index currently has a level of 875. The continuously compounded return on a 1-year treasury bill is 4.75%. You wish to hedge an $800,000 portfolio that has a beta of 1.1 and a correlation of 1.0 with the Dow Jones Index. One futures contract has the value of $250. (a) What is the 1-year futures price for the Dow Jones Index assuming no dividends? (1 points) (b) How many Dow Jones Index futures contracts should you short to hedge your portfolio? (2 points) (c) What return do you expect on the hedged portfolio? (2 points) Suppose the Dow Jones Index currently has a level of 875. The continuously compounded return on a 1-year treasury bill is 4.75%. You wish to hedge an $800,000 portfolio that has a beta of 1.1 and a correlation of 1.0 with the Dow Jones Index. One futures contract has the value of $250. (a) What is the 1-year futures price for the Dow Jones Index assuming no dividends? (1 points) (b) How many Dow Jones Index futures contracts should you short to hedge your portfolio? (2 points) (c) What return do you expect on the hedged portfolio? (2 points)