A company wishes to hedge its exposure to a new fuel whose price changes have a 0.6 correlation with gasoline futures price changes. The company will lose $1 million for each 1 cent increase in the price per gallon of the new fuel over the next three months. The new fuels price changes have a standard deviation that is 50% greater than price changes in gasoline futures prices. Each futures contract is on 50,000 gallons of gasoline. Which of the following statements is false?

Group of answer choices The company owns $100 million gallons of this new fuel. The optimal hedge ratio is 0.9. The optimal number of contracts for hedge is 1,800. The company should take a short hedge.