Suppose you are a portfolio manager of a $100 million hedge fund. You believe the stock market will go up in the next several years but the next three months will be bad. How would you use futures to hedge the entire portfolio of securities?

A stock index future is trading at $1,250. You would like to long 10 contracts? What is the total value of the stock index futures contracts?

A stock index option is currently trading at $1,000. You believe the stock market is going to decline. You decided to buy 8 stock index put option contracts for a total of $5,536 premium. If the stock index falls to $937, what is your profit or loss?