Imagine you are a portfolio manager who believes that growth stocks would do worse than the S&P 500 Index, but you are concerned that all stocks might go up or down during the next few weeks. Imagine that today’s date is March 16, 2018. September 2018 mini S&P futures are available at 2,752.01 (multiplied by $50). Vanguard Growth Index fund shares are available at $76.89 per share.

How many shares of Vanguard growth index fund can we long or short? Open.

1. Create a position combining one mini S&P futures contract with Vanguard Growth Index fund shares that would benefit you if your belief is ultimately correct.

2. Time has passed, and the date is August 10, 2018. The S&P futures contract is now trading at 2,559.36 and growth shares are at $69.20. How much money did your position make or lose?