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All students will begin the H1 trading simulation with $100,000,000 million invested across the ten companies. Students cannot trade the individual stocks, but they can purchase or short sell index futures (RTF). Students should construct a hedge using the index futures to minimize their portfolio variance for the 1 month ( 5 minutes of trading). The market index (RTX) is calculated based on 100 of the largest companies across all industries. The cash index value is currently 1050, and there is a one month futures contract (RTF) available to be traded with a contract multiplier of 250 . The index pays no dividends and the risk free rate is zero. The futures contract is marked-to-market daily, and is cash settled at month end. The minimum tick increment for the futures contract is 0.10 ( 1/10th of one index point). Discussion Questions and Follow Up: (2) What is the correct number of futures to use (and direction, long vs short) to hedge your equity portfolio? All students will begin the H1 trading simulation with $100,000,000 million invested across the ten companies. Students cannot trade the individual stocks, but they can purchase or short sell index futures (RTF). Students should construct a hedge using the index futures to minimize their portfolio variance for the 1 month ( 5 minutes of trading). The market index (RTX) is calculated based on 100 of the largest companies across all industries. The cash index value is currently 1050, and there is a one month futures contract (RTF) available to be traded with a contract multiplier of 250 . The index pays no dividends and the risk free rate is zero. The futures contract is marked-to-market daily, and is cash settled at month end. The minimum tick increment for the futures contract is 0.10 ( 1/10th of one index point). Discussion Questions and Follow Up: (2) What is the correct number of futures to use (and direction, long vs short) to hedge your equity portfolio