Problem $17-24($Algo$)$

The S&P $500$ Index is currently at $2,000.$ You manage a $$5$ million indexed equity portfolio. The S&P $500$ futures contract has a

multiplier of $$50.$

Required:

a$.$ If you are temporarily bearish on the stock market, how many contracts should you sell to fully eliminate your exposure over the

next six months?

Number of contracts

b$.$ If T$-$bills pay $3\mathrm{.}0\%$ per six months and the semiannual dividend yield is $1\mathrm{.}0\%,$ what is the parity value of the futures price? $($Do not

round intermediate calculations. Round your answer to $2$ decimal places.$)$

Parity value