You have a large holding of platinum, but are worried about a decline in platinum prices. Unfortunately, there are no platinum futures contracts available. The attached text file contains two columns: the first is the daily price of platinum, the second is the daily futures price for gold.

(a) Calculate changes (differences) for the two series of prices.

(b) What is the correlation between changes in the price of platinum and the gold futures price?

(c) What is the standard deviation of platinum price changes? What is the standard deviation of changes in the gold futures price? Hint: in calculating the standard devation, use the sample standard deviation.

(d) Suppose that you have 8000 ounces of platinum. Each gold contract covers 100 ounces. How many gold futures contracts should you take out to hedge your platinum? When submitting the answer to this question, only print out one single sheet from your spreadsheet. We want to see your first few rows of price changes, the calculations for the standard deviations and correlation, and the regression you ran for the last part.