Q12. What would have happened if you hedged using the econometric (optimal) hedge ratio (HR*) and optimal number of futures contract (NFC*)? Using the following table, calculate the revenue from selling the live animals in the local cash market, gain/loss from the futures position, total revenue, and net realized price per pound of live animal. Compare the results with the answers to questions 10 and 11. (10 points) Date/Action Cash Market Futures Market June 02, 2020 CP= 106.10 cents/lb. FP = 114.20 cents/lb. Action Dec. 16 CME LC contracts @ cents/lb. Oct 28, 2020 CP= 110.90 cents/lb. FP = 116.40 cents/lb. 1,000 cattle (1,200,000 Oct. 16 CME LC Action lb.) @ contracts a cents/lb. Gain / Loss = Return from Cash Market Return from Futures Market Net Return from Cash and Futures Markets Net realized price of live cattle (cents/lb.) Q12. What would have happened if you hedged using the econometric (optimal) hedge ratio (HR*) and optimal number of futures contract (NFC*)? Using the following table, calculate the revenue from selling the live animals in the local cash market, gain/loss from the futures position, total revenue, and net realized price per pound of live animal. Compare the results with the answers to questions 10 and 11. (10 points) Date/Action Cash Market Futures Market June 02, 2020 CP= 106.10 cents/lb. FP = 114.20 cents/lb. Action Dec. 16 CME LC contracts @ cents/lb. Oct 28, 2020 CP= 110.90 cents/lb. FP = 116.40 cents/lb. 1,000 cattle (1,200,000 Oct. 16 CME LC Action lb.) @ contracts a cents/lb. Gain / Loss = Return from Cash Market Return from Futures Market Net Return from Cash and Futures Markets Net realized price of live cattle (cents/lb.)