Business, 21.10.2020 16:01 fordkenae

The correlation between the monthly changes of the spot price and futures price of a commodity is 0.95. The standard deviations of monthly changes of the spot price and futures price are 0.25 and 0.30 respectively. Each futures contract represents 1000 units of the commodity. A company needs to purchase 50,000 units of the commodity in 1 month, and wants to use the futures contract hedge the price risk. How many futures contracts should the company long or short

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