Question: [1 point] Tatiana needs to purchase a specific commodity in about six months. She is concerned about unfavorable price movements, but unfortunately, there are no

 [1 point] Tatiana needs to purchase a specific commodity in about

[1 point] Tatiana needs to purchase a specific commodity in about six months. She is concerned about unfavorable price movements, but unfortunately, there are no futures contracts written on the commodity she needs. Futures contracts are, however, available on a related commodity which mature at the same time. The standard deviation of the spot price is $7.27, and the standard deviation of the futures price is $7.01. Assuming the correlation of the spot and futures prices is 0.82, what hedge ratio is optimal for the noted exposure

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