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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

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.

If a food manufacturer uses corn to produce its products ex-plain two methods they can use to hedge against changes in corn prices.

Explain why these strategies hedge against the manufacturer's risks.

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