Question: When does minimum variance hedge have no hedge effect at all? 1. There is no correct answer. 2. When the correlation coefficient between the futures

When does minimum variance hedge have no hedge effect at all? 1. There is no correct answer. 2. When the correlation coefficient between the futures price and the hedged asset price is -1. 3. When the correlation coefficient between the futures price and the hedged asset price is 1. 4. Minimum variance hedge always provides a perfect hedge effect. 5. When the correlation coefficient between the futures price and the hedged asset price is zero.

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