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Price changes of two gold-mining stocks have shown strong positive correlation. Their historical relationship is:...

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Price changes of two gold-mining stocks have shown strong positive correlation. Their historical relationship is: = Average percentage change in A = 0.001 + 0.68(percentage change in B) Changes in B explain 60% of the variation of the changes in A (R = 0.6). a. Suppose you own $117,000 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? (Round your answer to 2 decimal places.) Hedge ratio Here is the historical relationship between stock A and gold prices: Average percentage change in A= -0.002 + 1.41(percentage change in gold price)

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