-
+1 - 312-224-1615
Get in touch with us
-
support@helpwithassignment.com
Send us an e-mail
Solution Library
Calculation Standard Deviation and Correlation
Question
The standard deviation (square root of variance) of monthly changes in the spot price of jet fuel is 16.5 cents per gallon. The standard deviation of monthly changes in the futures price of crude oil is $4.5 per barrel. There are 31.5 gallons in 1 barrel. The correlation between the spot and futures price changes is 0.87. It is now October 15. An airline plans to purchase 1’000’000 gallons of jet fuel on November 15 and wants to use the December crude oil futures contracts to hedge risks in the jet fuel price. Each futures contract is for delivery of 1’000 barrels of crude oil. How many futures positions does the airline have to take to minimize its exposure to jet fuel price fluctuations? Ignore tailing adjustments to account for daily settlement.
Summary
The question belongs to Statistics and it is a calculation of standard deviation and correlation of spot price and futures prices of jet fuel. This question requires both the understanding of Finance and Statistics to arrive at the answer.
Total Word Count 49
Download Full Solution
WHAT OUR STUDENTS SAY
I had spent a lot on another online assignment service provider but their quality of work left a lot to be desired and most of the time I was having to redo the whole thing on my own. So I was ending up paying a bomb without getting any results. That is when my friend told me about the great quality and affordable prices of HwA. Once I gave it a try I knew I had hit gold! My grades improved a lot and I have also got a clearer understanding of the concepts of factor markets.
Ahmed Shah Student
I was clueless about the way in which I was supposed to approach my research dissertation paper till I came across the team of HwA. I was also not sure whether they could help me or not but to my surprise they started asking the right kind of questions to me. When I clarified them with my professor, she was impressed and told me that I understood the concept of the research dissertation.
Denise Hutchins Student
My main concern was the research that needed to be done for the human resources assignments for my undergraduate program. Keeping up with the course load and assignments from the other professors I was having a tough time. With TheReliableTutor, the tutors help out with the research saving my time and assisting me in submitting well researched and balanced assignments.
Gavin Rogers Student
I was unable to find any sort of solution to my case study related to the hip and femur fracture patient. However, I was surprised to see that in HwA they have a separate group of nursing experts for the musculo-skeletal assignments and homeworks. It was really helpful and till now I keep in touch with HwA for all my nursing solutions.
Chris Bunting Student
While pursuing my biotechnology course I stumbled on to the calculations and conceptualization of a DNA map assignment in genetics. I was unsure on how to go about it and was looking for help, online. I came across this site as they claimed to have a separate department for genetics assignment solutions. The experts here are really cool as they helped me understand and also helped me with the solution. Throughout my course I took help from them and I am really grateful.
Christopher Fisher Student
Comments
this is a very good website
I have 50 questions for the same test your page is showing only 28
hi can you please help or guide me to answer my assignments. thanks
hi can anyone help or guide me to my assignments. thanks
This solution is perfect ...thanks
Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes
Perfect bank of solution.
great !
thanks for the quick response. the solution looks good. :)
thnx for the answer. it was perfect. just the way i wanted it.
works fine.