Assume that there is no storage or other carrying costs/value for corn. Assume that corn is not perishable, that is it can be stored and used later and that the continuous compounded risk-free rate is 20% per year.

While the manufacturer does like to be hedged against the risk from rising corn prices, they are concerned if corn prices fall they will suffer large losses as their competitors (who are un-hedged) will undercut them.

What can the manufacturer do about this? Explain the advantages and disadvantages of your chosen strategy. Be specific in your description of the strategy/instruments used.