Define the minimum variance hedge ratio

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Reference no: EM131325808

1 .a. Define the minimum variance hedge ratio and the measure of hedging effectiveness? What do these two values tell us?

b. What is the price sensitivity hedge ratio? How are the price sensitivity and minimum variance hedge ratios alike? How do they differ?

2 .Explain how to determine whether to buy or sell futures when hedging.

Reference no: EM131325808

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