You are a spot hops trader for AB InBev and you are trying to hedge your hops price risk. There is no futures contract for hops so you use a barley futures contract as your hedge instrument. Through your calculations you find standard deviation of spot hop prices is = 0.25 and the volatility of the futures contracts over the same period is =0.66. The correlation of the two changes in prices is = 0.85. What is the optimal hedge ratio?

Group of answer choices

2.64

0.32

0.39

1.54

2.24