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7. The standard deviation of price changes in a wheat futures contract is 0.7, while the standard deviation of changes in the price of wheat

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7. The standard deviation of price changes in a wheat futures contract is 0.7, while the standard deviation of changes in the price of wheat is 0.9. The covariance between the spot price changes and the futures price changes is 0.5355. Which of the following is closest to the optimal hedge ratio? A. 0.689 B. 0.850 C. 1.093 D. 1.250

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