The following is part of the computer output from a regression of monthly returns on Waterworks stock against the S\&P 500 index. A hedge fund manager believes that Waterworks is underpriced, with an alpha of 1% over the coming month. Required: a-1. If he holds a $8.4 milition portfolio of Waterworks stock and wishes to hedge market exposure for the next month using one-month maturity S\&P 500 futures contracts, how many contracts should he enter? The S\&P 500 currently is at 2,000 and the contract multiplier is $50. a-2. Should he buy or sell contracts? Sell Buy b. Assuming that monthly returns are approximately normoliy distributed, what is the probability that this market-neutral strategy will lose money over the next month? Assume the risk-free rate is 0.8% per month. (Do not round intermediate calculations, Round your percentage answer to 2 decimal places.)