FRM Assignment 2: Hedging with Future Contract (5-Marks)



You are supposed to:
1. collect consecutive six months spot and future share prices data of the assigned companies.
2. Find the hedge ratio between spot and future prices
3. Assume that you have a long position of 3000 shares in the assigned company, then find the number of future contracts (N) to hedge your position
4. Tell wehter short-selling or taking a long-position will hedge your existing position
5. Calculate profit or loss right after the six months period (the period which you have used for calculating the hedge ratio)
6. Tell whether your position is fully hedged or not based on the findings in step 5







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