question 5.1 and 5.2

deviation of this spot price of is $.43. Use a cross hedge with futures for 5,000 units each; the current futures price for delivery at T is $27 / unit and the standard deviation of this futures price is $.40; the correlation coefficient of the spot and the futures prices changes is .95 . The trader uses the minimum ,variance hedge ratio and hedges the value of the commodity for the next three months.. 4.1 Calculate the minimum variance hedge ratio. h=(.95)(.43/.40)=1.02125 4.2 What hedge should be opened? Why. A Short hedge should be opened because the trader already owns the units and plans to sell 4.3 Calculate the optimal number of futures to be used in the hedge. =(1.02125)[60,000/5,000]12.255=12futures 5. Suppose that three months later, on date k, the hedge in Q4. was closed. 5.1 Use a time table to show the end result of the hedge if the spot price at k was Sk=$24/ unit and the futures price at k for delivery at T was Fk,T=$24.5/ unit. 5.2 Instead of the data in 5.1, show the result of the hedge if the spot and the futures prices at k where $31/ unit and \$32/unit, respectively