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Please show your work and explain how you got your answer along the way. Do not...

Please show your work and explain how you got your answer along the way. Do not simply show an answer or show a picture of an excel spreadsheet please.

The following table gives data on daily dollar changes in the spot price and the futures price for a certain commodity. Use the data to calculate a minimum variance hedge ratio.

day

1

2

3

4

5

Spot Price Change

+0.51

+0.50

−0.40

−0.46

+0.5

Futures Price Change

+0.47

+0.52

−0.27

−0.4

+0.60

day

6

7

8

9

10

Spot Price Change

+0.1

+0.1

+0.65

−0.51

−0.53

Futures Price Change

−0.06

+0.15

+0.80

−0.75

−0.64

0 0
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