Potential demand for hedging by Australian wheat producers

The potential for hedging Australian wheat with the new Sydney Futures Exchange wheat contract is examined using a theoretical hedging model parametised from previous studies. The optimal hedging ratio for an 'average' wheat farmer was found to be zero under reasonable assumptions about transaction costs and based on previously published measures of risk aversion. The estimated optimal hedging ratios were found by simulation to be quite sensitive to assumptions about the degree of risk aversion. If farmers are significantly more risk averse than is currently believed, then there is likely to be an active interest in the new futures market.

Optimal quantum trajectories for discrete measurements

Using the method of quantum trajectories we show that a known pure state can be optimally monitored through time when subject to a sequence of discrete measurements. By modifying the way that we extract information from the measurement apparatus we can minimize the average algorithmic information of the measurement record, without changing the unconditional evolution of the measured system. We define an optimal measurement scheme as one which has the lowest average algorithmic information allowed. We also show how it is possible to extract information about system operator averages from the measurement records and their probabilities. The optimal measurement scheme, in the limit of weak coupling, determines the statistics of the variance of the measured variable directly. We discuss the relevance of such measurements for recent experiments in quantum optics.