Using portfolio theory, you realize that to bring your portfolio closer to your ideal target portfolio on the efficient frontier, you should sell 7% of your holdings in Tokyo office and replace that with New York apartment. However, your acquisitions team doesnt feel that any of the properties for sale in New York are a good fit for your portfolio and selling out of Tokyo office without those apartment investments will likely take your portfolio farther away from your ideal risk/return profile on the efficient frontier. You are also concerned that the global commercial real estate market could decline over the next year, leaving your portfolio improperly allocated to handle a downturn.

Using derivatives, how could you position your portfolio to better achieve your target and provide insurance against a downturn? Explain.