Need Process

You are currently holding a portfolio of stocks worth RM 1,750,000. You wish to hedge your portfolio. You have the following information: Portfolio beta = 0.50 Spot Index value = 1400 points Risk-free rate = 5% per year 3-month SIF contract = 1417.20 points Expected dividend yield = 0% index multiplier =RM50 1. How many SIF contracts should you use to fully hedge your portfolio? [5 marks] 2. What are the hedge strategy for your portfolio. [3 marks] 3. What is your value of portfolio with hedge assuming the market falls 20% by futures maturity. [12 marks]