A trader owns 16,000 units of Asset A and decides to hedge the value of her position for the next six months with futures contracts on Asset B, which is related to Asset A. The spot price of Asset A is $40.13 per unit, and the standard deviation of the change in this price over six months is estimated to be $2.5. Each futures contract is on 4,000 units of Asset B. The current futures price of Asset B is $41.88 per unit, and the standard deviation of the change in this price over six months is $2. The coefficient of correlation between the spot price change for Asset A and the futures price change for Asset B is 0.77.

1) What is the minimum variance hedge ratio without daily settlement? Keep four decimal places.

2) To hedge the risk, the trader should take a (short/long) position in the futures contract.

3) What is the optimal number of futures contracts when daily settlement is not considered?

Note: Keep two decimal places in your final answer. Do not round the numbers to the closest integer. Do not use negative numbers.