Please continue this question from part e on : https://www.chegg.com/homework-help/questions-and-answers/problem-1-hedging-market-risk-index-futures-50-points-july-1-2020-investor-holds-50-000-sh-q48956711?trackid=MfPYzn25

On July 1, 2020 an investor holds 50,000 shares of a certaincompany stock. The market price at this time is $30 per share.

(a) what is the current value of investors portfolio

Value_________

The investor is interested in hedging against movements in the market over the next months (until Sep 2020) and decides to use the September 2020 Mini S&P 500 futures contract. The index futures price is currently 1,500 and one contract is for delivery of $50 times the index.

(b) What is the current value of one Mini S&P 500futures contract?

Value___________

(c) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure by trading S&P 500 market index

Trading strategy______

(d) The beta of the stock is 1.3. How can investor hedge his portfolio against market risk exposure using futures contract. Should he/she enter LONG or SHORT position. For how many futures contracts?

SHORT or LONG (circle)

N contracts________

(e) Assume the market goes down by 10% by the futures settlement date. What would be the change in the portfolio in c) (i.e. hedged without futures)

Change____

(f) Assume market goes down by 10% by the futures settlement date. What would be expected change in the portfolio value. What would be the gain/loss on futures margin account? What would be the total impact on hedged position?

Circle +Gain/-Loss on portfolio______________

Circle +Gain/-Loss on futures position______________

Total change in the hedge position value _______________