$3\mathrm{.}10.$ You are provided with the monthly spot and futures prices of coffee from $1/1/1995$ to

$4/1/2000.$ It is now April $15$th$,2000.$ A coffee producer is committed to selling $200,000$ pounds

of coffee on May $15$th$,2000.$ The producer wants to use the June coffee futures contract to

hedge its risk. Each contract is for delivery of $37,500$ pounds of coffee. Using all the data

provided, compute the optimal hedge ratio for a $1-$month contract and what strategy should

the producer follow?