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A firm will sell 750,000 bushels of wheat in 3 months. One wheat futures contract is for 5000 bushels. Suppose the current price of wheat
A firm will sell 750,000 bushels of wheat in 3 months. One wheat futures contract is for 5000 bushels. Suppose the current price of wheat is S0 = $3.7 per bushel, and the futures price is F0 = $3.89 per bushel. Suppose the optimal hedge ratio is actually h* = 0.87, then the optimal number of contracts is?
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