1. You own a stock portfolio with market value of $600,000, with a weighted average beta of 0.87. You want to hedge this portfolio from price volatility using the E-mini S&P500 index future (ES) with a price of 50xIndex value.

1. How many contracts do you need to fully hedge your portfolio if the 1-mo S&P500 Index is currently priced at 3,477? (round to the nearest whole number)
2. If you shorted 2 ES contracts and the index moves to 3,440 in a month, what will be your net gain (+) or loss (-) (must state gain or loss) for your entire position (i.e., your portfolio + the hedge)? [Hint: first compute the % change in index and portfolio values]