If the futures contract used to hedge a spot position is marked-to-market daily, then the minimum-variance hedge ratio formula $h ^ { * } = \rho \times \sigma ( \Delta S ) / \sigma ( \Delta F )$ computed ignoring daily resettlement is, in absolute terms,
A) Biased downwards.
B) Unbiased.
C) Biased upwards.
D) Biased downwards only if interest rates are nonzero.

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The Answer of If the futures contract used to hedge a spot position is marked-to-market daily, then the minimum-variance hedge ratio formula $h ^ { * } = \rho \times \sigma ( \Delta S ) / \sigma ( \Delta F )$ computed ignoring daily resettlement is, in absolute terms,
A) Biased downwards.
B) Unbiased.
C) Biased upwards.
D) Biased downwards only if interest rates are nonzero.

If the Futures Contract Used to Hedge a Spot Position h∗=ρ×σ(ΔS)/σ(ΔF)h ^ { * } = \rho \times \sigma ( \Delta S ) / \sigma ( \Delta F )h∗=ρ×σ(ΔS)/σ(ΔF)

If the Futures Contract Used to Hedge a Spot Position $h ^ { * } = \rho \times \sigma ( \Delta S ) / \sigma ( \Delta F )$