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A corn grower is concerned that the price he can get from the field in mid-September will be less than he has forecasted. To protect himself from price declines, the farmer has decided to hedge. The best available futures contract he can find is for August delivery. Which of the following is the appropriate direction of his position and the source of basis risk that may impact the farmer? A. Short futures; rollover. B. Short futures; correlation. C. Long futures; correlation. D. Long futures; rollover. |