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The optimal hedge ratio h in futures hedging: Group of answer choices Is equal to the covariance between changes in the spot and futures prices,

The optimal hedge ratio h in futures hedging:

Group of answer choices

Is equal to the covariance between changes in the spot and futures prices, divided by the variance of the change in futures prices..

Is equal to the call option premium divided by the put option premium.

Is based on a long spot exposure hedged by buying futures contracts.

Is usualy used to increase basis risk.

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