Youtor
FRM Optimal number of futures contracts in a cross hedge
>> YOUR LINK HERE: ___ http://youtube.com/watch?v=p-bBbdvy7r8
If the futures contract moves in lockstep with the spot price of the asset being hedged, the hedge ratio is 1.0; e.g., to hedge 1 million gallons of jet fuel, we might take a long position in 24 heating oil futures contracts: 1 mm / 42,000 gallons per contract = about 24. But jet fuel is not heating oil, so we are cross-hedging. For more financial risk videos, visit our website! http://www.bionicturtle.com
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