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Silver futures and spot silver have a correlation factor of 0.97. If the standard deviation for the futures contract is 2.98 and the standard deviation

Silver futures and spot silver have a correlation factor of 0.97. If the standard deviation for the futures contract is 2.98 and the standard deviation for the spot is 1.87.

What is the optimum hedge ratio?

Based on the results in Problem what is the optimum number of SIL contracts to hedge 5,220 troy ounces of silver held in inventory?

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