An investor wishes to hedge a bond with a par value of $250 million with Treasury bond futures. Assume that (1) the conversion factor for the cheapest-to-deliver issue is 1.0125; (2) the price value of a basis point (PV01) of the cheapest-to-deliver issue at the settlement date is 0.0753 and (3) the price value of a basis point (PV01) for the bond to be hedged is 0.0683.

What is the hedge ratio?

How many Treasury bond futures should be purchased/sold to hedge the bond?