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How many contracts should gd buy or sell

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Question - Generous Dynamics is planning on buying 12000 ounces of gold in six months. The correlation of the six-month change in the spot and futures price is .4. The standard deviation of six-month change in spot and futures price are 11 percent and 39 percent, respectively. Futures contract size is 1000 ounces. How many contracts should GD buy or sell to hedge the future purchase?

Reference no: EM133031547

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