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You are looking into placing a hedge in the palladium futures market for your future sale of platinum. You examine the movements of both platinum
You are looking into placing a hedge in the palladium futures market for your future sale of platinum. You examine the movements of both platinum spot prices and palladium futures prices. The standard deviations of platinum's spot price and palladium's future price are 2,000 and 500 respectively. The correlation between these two prices is .5. What is the hedge ratio you should use for a one-time hedge
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