Based on the Minimum Variance Hedge Ratio Approach,what Is the Optimal

question 42

Multiple Choice

Based on the minimum variance hedge ratio approach,what is the optimal number of futures contracts to deploy,given the following information.The correlation coefficient between changes in the underlying instrument's price and changes in the futures contract price is 0.95,the standard deviation of the changes in the underlying position's value is 300%,and the standard deviation of the changes in the futures contract's price is 11.4%.

• A)long 35 futures contracts
• B)long 25 futures contracts
• C)long 15 futures contracts
• D)short 25 futures contracts
• E)short 15 futures contracts

Analyze and journalize business transactions and understand their effect on the accounting equation.

Compare and contrast accounting conventions and practices under GAAP and IFRS.

Understand the principles of double-entry accounting and the normal balance for various types of accounts.

Identify and apply the correct process for posting journal entries.

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