James Bond manages an equity portfolio valued at 100,000,000 British pounds. The beta of the portfolio is currently -0.5. Bond seeks to hedge the portfolio against systematic risk using FTSE100 index futures contract from October 17, 2014 to November 17, 2014. He decides that over the coming month a portfolio return equal to the risk-free rate of interest is adequate given the overall market conditions. As the analyst assisting the fund manager, you are given the following information: . . FTSE100 spot index as at October 17, 2014 = 5,190 November FTSE100 index futures price as of October 17, 2014 = 5,250. Each futures contract is on 10 British pounds times the index Correlation between the FTSE100 spot returns and FTSE100 futures returns = 1 FTSE100 futures return standard deviation = 1.00 FTSE100 spot return standard deviation = 1.00 . O What should you recommend James Bond to do in order to achieve his hedging objective stated above (round number of contracts to the nearest integer)? James Bond manages an equity portfolio valued at 100,000,000 British pounds. The beta of the portfolio is currently -0.5. Bond seeks to hedge the portfolio against systematic risk using FTSE100 index futures contract from October 17, 2014 to November 17, 2014. He decides that over the coming month a portfolio return equal to the risk-free rate of interest is adequate given the overall market conditions. As the analyst assisting the fund manager, you are given the following information: . . FTSE100 spot index as at October 17, 2014 = 5,190 November FTSE100 index futures price as of October 17, 2014 = 5,250. Each futures contract is on 10 British pounds times the index Correlation between the FTSE100 spot returns and FTSE100 futures returns = 1 FTSE100 futures return standard deviation = 1.00 FTSE100 spot return standard deviation = 1.00 . O What should you recommend James Bond to do in order to achieve his hedging objective stated above (round number of contracts to the nearest integer)