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Smarty Pants sold 100,000 gallons of Apple Juice to Meijer to be delivered in three months. A future contract is available on Orange Juice (10,000

Smarty Pants sold 100,000 gallons of Apple Juice to Meijer to be delivered in three months.

A future contract is available on Orange Juice (10,000 gallons/contract).

The standard deviation of price changes in apple juice is $0.05 and orange juice is $0.10 and

the correlations of price changes between apple juice and orange juice is 0.8.

How many futures contracts are needed for a cross hedge?

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