Question
Rare Coins is going to sell 5,000 common $20 gold coins in July. The company would like to hedge this transaction using the following
Rare Coins is going to sell 5,000 "common" $20 gold coins in July. The company would like to hedge this transaction using the following available futures. The company has collected the regression result of common $20 gold coin price on each futures price as below. Futures on gold: SGc-350+1.5FG, R-0.78 Futures on platinum: SGc= 50+0.5Fp, R-0.82 Futures on silver coin: SGc= 128+23Fsc. R-0.85 Which is the best contract the company should use to hedge?
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Financial Markets and Institutions
Authors: Anthony Saunders, Marcia Cornett
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9780077641849, 77861663, 77641841, 978-0077861667
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