Suppose That the Variance of Quarterly Changes in the Spot

question 5

Multiple Choice

Suppose that the variance of quarterly changes in the spot prices of a commodity is 0.49,the standard deviation of quarterly changes in a futures price on the commodity is 0.64,and the coefficient of correlation between the two changes is 0.8.The optimal hedge ratio for the contract is:

• A) 0.771
• B) 0.363
• C) 0.700
• D) 0.875
• E) None of these answers are correct.

Understand the impact of conditioning on emotions and behaviors, such as fear and preferences.

Identify the Law of Effect and its role in learning and behavior modification.

Describe the phenomenon of learned helplessness and its effects on behavior.

Understand the implications of classical and operant conditioning principles in real-world settings, such as education, therapy, and work environments.

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An uncomfortable or embarrassing situation that arises in social interactions.

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