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5T Corporation has corn growing in the field and intends on selling the corn in the open market once harvested in the month of August.
5T Corporation has corn growing in the field and intends on selling the corn in the open market once harvested in the month of August. The company is in tight financial condition and a loss on its corn crop this year would deal a devastating blow to its long-term survival. Which of the following financial engineering strategies enacted to reduce risk would make the most sense for 5T at this time?
a. Buy call options on corn
b. Buy a straddle on corn
c. Write put options on corn
d. Write call options on corn
e. Buy put options on corn
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