You owe 100,000 Euro in one year. A one-year futures on the Euro settles at $1.20 today. You decide to hedge with this contact. The following table allows you to calculate the value of your futures position, the value of your physical position, and the total portfolio value on the maturity day, depending on the exchange rate at that time. What is the total portfolio value? Hint: it should not depend on the maturity day exchange rate.

	Maturity Day Exchange Rate, $$ per Euro
	$1.00	$1.20	$1.40
Value of your position in the futures
Value of your physical position in Euro
TOTAL PORTFOLIO VALUE

	a.	+120,000
	b.	-120,000
	c.	+140,000
	d.	-100,000

You short an equity portfolio worth $60 million with a market beta of 0.8. The market index is currently at 3000. Which of the following statements is correct?

	a.	You need to go long the futures on your exact portfolio to hedge the market risk
	b.	You need to go short the futures contract on the market index to hedge your market risk
	c.	Should the market index increase in value, you expect the value of your portfolio to increase
	d.	The delta of your portolio is negative, because you are short