Business, 02.11.2020 16:30, adyenamaie02

Suppose that the standard deviation of monthly changes in the price of jet fuel is $2. The standard deviation of monthly changes in crude oil (which is similar to jet fuel) is $3. The correlation between jet fuel and crude oil is 0.9. What position in crude oil futures should be used by Southwest to hedge the purchase of 50,000 gallons of jet fuel at the end of one month. The multiplier for crude oil futures contracts is 1,000. Group of answer choices Sell 0.6 contracts. Buy 0.6 contracts. Sell 30 contracts. Buy 30 contracts.

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Suppose that the standard deviation of monthly changes in the price of jet fuel is $2. The standard...