A technology hedge fund is trying to decide whether to hedge equity market risk. The fund has just gone through one of the most volatile periods in Nasdaq history and they are trying to decide whether to continue to short the Nasdaq or use derivatives.\ \ 1) What is the structure of a hedge fund? What can hedge funds do that mutual funds cannot?\ 2) What risks does PSC want to hedge and what risks is PSC willing to bear? Why? How would you hedge these risks on July 26 using a short-selling strategy? What problems arise with the short-sale strategy?\ 3) PSC is considering using options for its hedging program. How does options-hedging help with PSCs problems?\