A manufacturer of breakfast cereal is concerned about corn prices. The firm anticipates needing 1 million bushels of corn in one month. The current price of corn is $6.50 per bushel and the futures price for delivery in one month is $7.00 per bushel. The cost to store the corn for 1 month is $100,000. What should the firm do?

A.Hedge with futures for a total cost of $6,900,000.

B.Wait one month and buy the corn at the market price in one month.

C.Hedge with futures for a total cost of $7,000,000.

D.Buy the corn now and store for 1 month, for a total cost of $6,500,000.

E.Buy the corn now and store for 1 month, for a total cost of $6,600,000.