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Intro Assume that the standard deviation of monthly changes in the oil price is $1, the standard deviation of monthly changes in the heating oil

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Intro Assume that the standard deviation of monthly changes in the oil price is $1, the standard deviation of monthly changes in the heating oil forward price is $2.74, and the coefficient of correlation between the two changes is 0.4. Part 1 Attempt 1/4 for 10 pts. What is the optimal hedge ratio to hedge future oil production in 1 month(s) with heating oil forward 1-month(s) contract

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