Question
Alfonso is a cattle rancher in west Texas. He plans to bring 107 thousand pounds of steers to market in September. Today is April. Alfonso
Alfonso is a cattle rancher in west Texas. He plans to bring 107 thousand pounds of steers to market in September. Today is April. Alfonso plans to hedge his future sale with live cattle futures contracts. Each contract has 40,000 pounds of live cattle as the underlying asset. For whatever reason, Alfonso has decided to use 4 contracts in his hedge. What is his hedge ratio?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
8th Canadian Edition
01259270114, 9781259270116
