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4) At Kermit and Miss Piggy Power, your profit function is -37.89 + 0.087H -.00004.8H2, where H is the number of heating degree days. H

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4) At Kermit and Miss Piggy Power, your profit function is -37.89 + 0.087H -.00004.8H2, where H is the number of heating degree days. H has mean 930 and standard deviation 140. A: What is the probability you will lose money? B: You don't care if you lose money because it is too warm. You do, however, want to reduce the probability of losing money because it is too cold to 7 percent. You can buy call or put options up to 0.7 standard deviations away from the mean, at a markup of 20 percent. Given all this, what strategy will you take to hedge your risk

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