Mr. Adam sold short 100 units of a bond at $1,100 per unit a few weeks ago. Today the price per bond is $1,050 per unit. Mr. Adam is concerned that the price of the bond may rise, shrinking his current gains and he wants to hedge his short position.

Suppose he buys 80 units of the bond today at S1,050 per unit. Calculate his profit (loss) at a future date t from his total portfolio position at each of the following levels of the bond price: (a) S1,000, (b) $1,100 and (c) S1,150. By buying 80 units of the bond today, does Mr. Adam get full hedge of his short position. Explain.