It is May 17. A company has a portfolio of stocks worth $120 million. The beta of the portfolio is 1.35. The company would like to use the December futures contract on a stock index to change beta of the portfolio to 0.60 during the period May 17 to September 17. The index is currently 900, and each contract is on $250 times the index.

a) What position should the company take?

b) Suppose that the company changes its mind and decides to increase the beta of the portfolio from 1.35 to 1.60.

What position in futures contracts should it take?