QUESTION: Mr. White has a portfolio worth 50 million dollar with a beta (B) of 0.87. Mr. White is concerned about the performance of the market over the next 2 months and plans to use 3 month futures contracts on the Nasdaq to hedge the risk. The current level of the index is 1250, one contract is on 250 times the index, the risk-free rate is %6 per annum, and the dividend yield on the index is %3 per annum. The current 3 month futures price is 1259. Answer the following questions related to text: 1.) What position should the Mr. White take to eliminate all exposure to the market over the next two months? 2.) Calculate the effect of your strategy on the Mr. White's returns if the level of the market in two months is 1,200. Also, assume the 1month futures price is 0.25% higher than the index level in 2months. QUESTION: Mr. White has a portfolio worth 50 million dollar with a beta (B) of 0.87. Mr. White is concerned about the performance of the market over the next 2 months and plans to use 3 month futures contracts on the Nasdaq to hedge the risk. The current level of the index is 1250, one contract is on 250 times the index, the risk-free rate is %6 per annum, and the dividend yield on the index is %3 per annum. The current 3 month futures price is 1259. Answer the following questions related to text: 1.) What position should the Mr. White take to eliminate all exposure to the market over the next two months? 2.) Calculate the effect of your strategy on the Mr. White's returns if the level of the market in two months is 1,200. Also, assume the 1month futures price is 0.25% higher than the index level in 2months