You manage a diversified equity portfolio and you are worried that the stock market will perform poorly over the coming twelve months as investors become more pessimistic about the recovery from the pandemic and delays to fully opening the economy. The fund currently has assets under management of $1.2 million and the portfolios beta is 1.3 The current price of the S&P ASX 200 futures contract is 6900. How many contracts should the fund buy or sell to fully hedge this risk? Suppose the market actually earned a return of 20 percent over the next twelve months, how would the hedged and unhedged positions have performed? Make any reasonable assumptions that you feel are necessary.