Part 4 The date today is July 8, 2019. A food company is planning to sell 7,000,000 pounds of beef in six months. The company is concerned about changes in the price of beef. Your assignment is to construct a futures contract hedge to protect the company's selling price. The current wholesale price of beef is 106 Cents per pound. The livestock futures contracts are for 40,000 pounds. The futures contract quoted price is Cents per pound. The coefficient of correlation between livestock and beef is 0.95. The standard deviation of livestock and beef are 57.25 and 70.25 respectively. The available futures contracts are This information was downloaded from CME Group website: Month Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-20 Feb-20 Apr-20 Last 116.325 117.825 110.65 109.675 111 106.075 108.65 112.825 Prior Change Settle Open High Low -0.2 116.525 116.5 116.775 115.35 -0.425 118.25 118.45 118.45 117.125 -0.5 111.15 111.175 111.175 110 -0.325 110 109.7 110 108.95 -0.6 111.6 111111111 -0.3 106.375 | 106.85 107.325 | 105.775 -0.975 109.625 109.9 110.275 108.3 -0.875 113.7 | 113.775 114.05 112.4