You are currently holding a portfolio of stocks worth $1,750,000. You wish to hedge your portfolio and have the following information: Portfolio beta = 0.80 Spot index value = 700 points Risk free rate = 5% per year 3 month SIF contract = 708.6 points Expected dividend yield = 0% Index multiplier = $100 (i) How many SIF contracts should you use to fully hedge your portfolio? (2 marks) (ii) Outline the hedge strategy and show the resulting portfolio value assuming the market falls 20% by futures maturity