Questions 16 and 17 are based on the following information:

A company has a $2.5 million stock portfolio with a beta of 1.2. The futures price for a contract on an index is 1000. Futures contracts on $250 times the index can be traded.

Question 16 (1 point)

What is the size of each index futures contract?

Question 16 options:

	$1,000
	$100,000
	$120,000
	$250,000

Question 17 (1 point)

What trade is necessary to completely hedge the market risk?

Question 17 options:

	Long 10 contracts
	Short 10 contracts
	Long 12 contracts
	Short 12 contracts