investor plans to buy $700$ ounces $($oz$)$ of gold in three months' time. He or shewants to hedge against price movements by opening a position in futures contracts for $100$ ounces of gold each. Assume that the average price deviation in the futures market is $3\mathrm{.}5\%,$ in the spot market is $5\mathrm{.}6\%$ and that the price correlation between hese markets is $0\mathrm{.}8$:a$)$ What price change in the underlying market is the investor concerned about?Which futures hedging strategy should he or she choose $($please provide the name of the proper strategy and explain why$)?(2$ points$)$b$)$ Is it appropriate to hedge with futures contracts at a ratio of $1$:$1$ to the underlying instruments? Give the appropriate number of futures contracts used for hedging and indicate the position in these contracts. $(2$ points$)$c$)$ If the current price of gold is $2190$ EUR$/$oz$,$ while the price of the futures contract $(4$ months$)$ is $2205$ EUR$/$oz$,$ and in $2$ months the price of gold will increase by $15\%,$ while the price of the futures contract $12\%$ respectively, how will this affect the investor's situation? Calculate the investor situation in the spot $($gold$)$ market and in gold futures separately. Compare profits and$/$or losses. $(4$ points$)$d$)$ Compare the result in point c$)$ with the situation if the investor hedged $1$:$1(2$ points$)$