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Uconn Hockey produces 15,000,000 hockey pucks a year and uses 5 ounces of rubber in each puck. From their analysis they determine = 0.90, puck
Uconn Hockey produces 15,000,000 hockey pucks a year and uses 5 ounces of rubber in each puck. From their analysis they determine = 0.90, puck = 0.15 & rubber = 0.25. Suppose rubber future contracts are for 160,000 ounces of rubber. How many future contracts should Uconn Hockey use to hedge and should they long or short?
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