3. (Opposite hedge variance) Assume that cash flow is given by y = SyW+(FT - Fo)h. Let o} = var(St),o} = var(Fr), and ost = cov(St,Fr). (a) In an equal and opposite hedge, h is taken to be an opposite equivalent dollar value of the hedging instrument. Therefore h=-kW, where k is the price ratio between the asset and the hedging instrument. Express the standard deviation of y with the equal and opposite hedge in the form Oy = Wos x B. (That is, find B.) (b) Apply this to Example 12.12 and compare with the minimum-variance hedge. 3. (Opposite hedge variance) Assume that cash flow is given by y = SyW+(FT - Fo)h. Let o} = var(St),o} = var(Fr), and ost = cov(St,Fr). (a) In an equal and opposite hedge, h is taken to be an opposite equivalent dollar value of the hedging instrument. Therefore h=-kW, where k is the price ratio between the asset and the hedging instrument. Express the standard deviation of y with the equal and opposite hedge in the form Oy = Wos x B. (That is, find B.) (b) Apply this to Example 12.12 and compare with the minimum-variance hedge