Question: Today is September 8 th 2 0 2 4 . Jewelry Company plans to sell 1 5 , 0 0 0 ounces of platinum in

Today is September 8th 2024. Jewelry Company plans to sell 15,000 ounces of platinum in November 2024. The current December 2024 platinum futures price is $925 per ounce. The standard deviation of changes in the futures price per ounce is 10.5, and the standard deviation of changes in the spot price per ounce is 12.7. The correlation coefficient between the spot and futures price change is 0.75. Each futures contract delivers 50 ounces of platinum.
Part I.
How many contracts does Jewelry Company need to hedge their position using the optimal hedge ratio? Show your calculation

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