Question: 14 X A B C D E F G H Hedging Data Optimal Hedged Return Date WTI WTI Return BRENT BRENT Return CL CL Return

14 X A B C D E F G H Hedging Data Optimal Hedged Return Date WTI WTI Return BRENT BRENT Return CL CL Return WTI BRENT 1/4/2021 $47.47 50.37 $47.62 1/5/2021 $49.78 4.8% $53.16 5.42 $49.93 4.7% 1/6/2021 $50.45 1.32 $53.80 1.2% $50.63 1.42 1/7/2021 $50.63 0.42 $53.70 -0.2% $50.83 0.4% 1/8/2021 $52.14 2.9% $55.51 3.3R $52.24 2.7% 1/11/2021 $52.15 0.0% $54.84 1.2% 152.25 0.0% 1/12/2021 $53.08 $55.36 2.12 $53.21 1/13/2021 $52.81 -0.5X $55.52 -0.8% $52.31 -0.6% 12 1/14/2021 $53.47 1.23 $55.76 0.4% $53.57 1.25 13 1/15/2021 $52.25 2.32 $54.80 -1.72 $52.36 2.32 14 1/19/2021 $52.87 1.2% $55.36 1.12 152.98 1.22 15 1/20/2021 $53.16 $55.66 0.52 $53.24 0.52 16 1/21/2021 $53.00 0.3% $55.68 0.02 $53.13 0.2% 17 1/22/2021 $52.28 -1.4% $55.22 -0.8% $52.27 -1.6% 1/25/2021 $52.78 1.02 $55.44 0.4% $52.77 1.0% 14 1/26/2021 $52.61 -0.3% $55.26 -0.3% $52.61 -0.32 20 1/27/2021 $52.81 0.42 $55.07 -0.3% $52.85 0.5% 21 1/28/2021 $52.26 -1.02 $54.87 -0.4% $52.34 -1.02 22 1/29/2021 $52.16 -0.2% $55.25 D.73 $52.20 -0.3 23 2/1/2021 $53.55 2.6% 156.42 2.12 $53.55 2.62 24 2/2/2021 $54.77 2.3% $57.62 2.12 $54.76 2.25 25 2/3/2021 $55.67 1.6% $56.61 1.7% $55.69 1.7% 26 2/4/2021 $56.13 0.9% $58.98 0.6% $56.23 1.0% 27 2/5/2021 $56.80 1.1% $59.48 0.8: $56.85 1.12: 2/8/2021 $57.95 2.0% $60.17 1.2% $57.37 2.0% 24 2/9/2021 $58.34 0.7% $60.74 0.9: $58.36 0.7% 30 2/10/2021 $56.63 0.6% $61.17 0.7% $58.68 0.5% 31 2/11/2021 $58.22 -0.8% $61.09 0.15 $58.24 0.83 32 2/12/2021 $59.50 2.2% 162.47 2.27 $59.47 2.12 33 2/16/2021 $60.07 1.02 $63.96 2.4% $60.05 1.0% 34 2/17/2021 $61.09 1.7% $65.02 1.6% $61.14 1.8% 35 2/18/2021 $60.40 1.12 $64.09 1.42 $60.52 -1.0% 2/19/2021 159.12 2.12 $62.84 -2.0% 159.24 2.1: 37 2/22/2021 $61.67 4.2% $64.73 3.0% $61.43 3.7% 2/23/2021 $61.56 0.0% $65.16 0.7% $61.67 0.32 39 2/24/2021 $63.21 2.5% $66.85 2.6% $63.22 2.5% 40 2/25/2021 163.43 $66.63 0.2% $63.53 0.57 41 2/26/2021 $61.55 -3.0% $65.86 1.3 $61.50 3.2% 43 3/1/2021 $60.54 -1.72 $64.56 -2.0% $60.64 -1.4%\f\f\f\f\f246 12/20/2021 $68.69 -3.2% $70.51 -3.4X $68.23 -3.84 247 12/21/2021 $71.10 3.4X $72.85 3.34 $71.12 4.1 24 12/22/2021 $72.82 2.42 $74.69 2.52 $72.76 249 12/23/2021 $73.83 1.5% $76.26 2.12 $73.73 250 12/27/2021 $75.43 2.12 $76.26 0.02 $75.57 2.4% 251 12/28/2021 $76.01 0.72 $76.26 0.0% $75.98 0.52 252 12/29/2021 $76.58 0.72 $78.63 3.12 $76.56 0.82 253 12/30/2021 $76.83 0.3% $78.61 0.0% $76.39 0.62 254 12/31/2021 $75.33 -2.0% $77.24 -1.8% $75.21 .37F15 X V ABC D E F G H I J K L 5 x Hedging Using Futures 6 1. WTI BRENT CL Mean 0.36% 0.34% 0.35% 8 Standard Deviation 2.05% 2.01% 2.05% 9 WTI and CL BRENT and CL 2. Covariance 0.04% 0.04% Correlation 99.82% 39.29% 13 14 3. Standard Deviation - Not Hedged WTI BRENT 15 16 17 WTI BRENT 18 4. Hedge Ratio 20 5. Barrels of WTI Crude Oil Hedged Barrels of BRENT Crude Oil Hedged Contract Size Contract Size Position: Long or Short? Position: Long or Short? Optimal # of Contracts Optimal # of Contracts X 6. Standard Deviation - Hedged WT BRENT 7 7. Your explanation: 37

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