Q3. You are the manager of a stock portfolio. On January 1. your holding consists of 10 stocks listed in

the following table, which you intend to sell on July 1. You are concerned about market decline over the

next 6 months., the number of shares their prices and betas are shown below.

Stock	# Shares	Beta	January 1 Price	July 1 Price
Nike	10,000	0.51	$65.10	$52.20
GE	15,000	0.99	$17.90	$16.00
Caterpillar	4,000	1.62	$140.47	$126.47
P&G	7,000	0.48	$90.43	$82.35
Coca-Cola	12,000	0.58	$45.22	$41.34

On January I. you decide to execute a hedge using a S&P 500 futures contract that has a multiplier of $500.

The September contract price for the futures contact is $2645.20. On July l. the September futures price is $2380.88. Find out how effective is your hedge? Also, will you go long or short on futures contract? Calculate the final value of your hedge.