FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 6 Suppose that the standard deviation of quarterly changes in the prices of a commodity is $0.66, the standard deviation of quarterly changes in

image text in transcribed
QUESTION 6 Suppose that the standard deviation of quarterly changes in the prices of a commodity is $0.66, the standard deviation of quarterly changes in a futures price on the commodity is $0.58, and the coefficient of correlation between the two changes is 0.78. What is the optimal hedge ratio for a three-month contract? O 134.48% O 51.48% O 88.76% O 68.55%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Finance

Managerial Finance

Authors: John Fred Weston, Eugene F. Brigham, John Boyle, Robin John Limmack

1st Edition

0039101975, 978-0039101978

More Books

Students also viewed these Finance questions

Question

★★★★★
The employee benefits manager of a large public university wants to determine whether differences exist in the proportions of various groups of full-time employees who prefer adopting the second...

Answered: 1 week ago

Question

★★★★★
4-47. All of the following are conceptualized zones related to an individuals personal space except: a. Public zone b. Personal zone c. Intimate zone d. Preferential zone

Answered: 1 week ago

Question

★★★★★
If it is known that p 12 and that the mean and the variance of X are E(X) = 3 and Var(X) = 1, find the values of a and p.

Answered: 1 week ago

Question

★★★★★
The presidents executive jet is not fully utilized. You judge that its use by other officers would increase direct operating costs by only $20,000 a year and would save $100,000 a year in airline...

Answered: 1 week ago

Question

★★★★★
18 omework (similar to) 70, 35.98 OP 82 points Points: 2.15 of 8 Part 3 of 6 Save The Wonderful World of Music Store carnes a large inventory of guitars and other musical instruments Company records...

Answered: 1 week ago

Question

★★★★★
Go back and quickly review the rules that the Sarbanes-Oxley Act of 2002 placed on the auditing profession as described in this chapter. What do you think are the two or three main purposes of these...

Answered: 1 week ago

Question

★★★★★
please answer number 4,5,6,& 7 Cash Flow Practice Quiz Comparable balance sheets are presented below: Dec 31, 2015 Dec 31, 2014 Assets 1.9 0.3 Cash Accounts Receivable Inventory Property, Plant &...

Answered: 1 week ago

Question

★★★★★
These tables provide the output from a multiple regression analysis looking at the impact of number of internet ads and product attractiveness on online laptop sales. How much of the variation in...

Answered: 1 week ago

Question

★★★★★
Identify the type of sampling that is used in this statement: The library, interested in the opinions of its patrons, surveys every 5th person who comes to the library over several days. Question 10...

Answered: 1 week ago

Question

★★★★★
5. Consider this figure below, which shows a 1D, single-phase, steady state flow taking place in homogeneous, porous medium. Use the diffusivity equation below and with the boundary conditions to...

Answered: 1 week ago

Question

★★★★★
Frank Catton, the general manager of Billybob's floating raft hotel and casino in Tunica Mississippi, has installed the "The Wheel of Doughnuts" at the hotel check in desk. When someone checks in...

Answered: 1 week ago

Question

★★★★★
Answer in C language is required. Task 1. Your task is to add required socket API calls TCP and UDP server & client. After that, compile and run both server & client and understand the code. Task 2....

Answered: 1 week ago

Question

★★★★★
=+e. Does the body copy have objectionable widows (one word sitting alone at the top of a new copy block) or orphans (one word dangling at the end of a paragraph)?

Answered: 1 week ago

Question

★★★★★
=+v. Button clever closing line, like Priceless (at the end of MasterCard ads and commercials, which doubles as the tagline).

Answered: 1 week ago

Question

★★★★★
=+vii. Bullet points to emphasize important ideas.

Answered: 1 week ago

Previous Question Next Question