Answer: A, B, C, D

A common method for calculating the optimal hedging ratio is called the minimum variance method. The optimal hedging ratio calculated in this way is called It is the minimum variance hedging ratio, which is specifically reflected in minimizing the variance of the entire asset portfolio's returns. When the underlying stock index of the stock index futures used for hedging is highly correlated with the entire market portfolio, the beta coefficient of the stock or stock portfolio is a good approximation of the minimum variance hedging ratio of the stock index futures. That is, the β coefficient can be used as the optimal hedging ratio. When the total spot value and the value of futures contracts have been determined, the number of futures contracts required to be bought and sold is related to the size of the β coefficient. The larger the β coefficient, the more the number of futures contracts required; conversely, the smaller the number of futures contracts required.