Boost your Grades with us today!


Price changes of two gold-mining stocks have shown strong positive correlation. Their historical relationship is: Average percentage change in A = 0.001 + 0.71(percentage change in B) Changes in B explain 60% of the variation of the changes in A (R2 = 0.6). a. Suppose you own $114,000 of

A. How much of B should you sell to minimize the risk of your net position? Amount of B to sell b. What is the hedge ratio? (

Hedge ratio Here is the historical relationship between stock A and gold prices: Average percentage change in A = -0.002 +1.38(percentage change in gold price)

C-1. If R2 = 0.46, can you lower the risk of your net position by hedging with gold (or gold futures) rather than with stock B? Yes No

c-2. Will this provide as good of a hedge as the sale of stock B?


15% off for this assignment.

Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!

Why US?

100% Confidentiality

Information about customers is confidential and never disclosed to third parties.

Timely Delivery

No missed deadlines – 97% of assignments are completed in time.

Original Writing

We complete all papers from scratch. You can get a plagiarism report.

Money Back

If you are convinced that our writer has not followed your requirements, feel free to ask for a refund.