A dental firm has estimated its demand for silver to be 10,000 troy ounces during December and January. The firm is concerned that prices will rise in the interim and would like to lock in todays price of $5.60 without purchasing the silver today. On June 15th, the CBOTs December futures contract trades at $5.90. Since each contract controls 1000 troy ounces, the firm locks into a price of $5.90 by buying 10 contracts. In late November, the spot price has increased to $8.00 and the futures contract is priced at $8.45. At that time the firm sells the futures contract and purchases the silver at spot prices. Compare the cost of purchasing silver in November, unhedged position, with cost of silver utilizing a hedging strategy