Contracts are needed to minimize the variance of profit

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Reference no: EM131585100

Suppose Samsung produces 800 phones and each requires 2 oz. of silver to produce. The standard deviation of the phone price is 0.15 and the standard deviation of the silver price is 0.55. The correlation between silver and the phone price is 0.65. One silver contract calls for delivery of 25 oz. of platinum. How many contracts are needed to minimize the variance of profit?

Reference no: EM131585100

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