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Suppose that the manager did place the hedge in May. We are now on October 15th, 2020 and the plant has just taken delivery of
Suppose that the manager did place the hedge in May. We are now on October 15th, 2020 and the plant has just taken delivery of the corn whose price she hedged. She is now managing price risk for the next corn intake, for mid-February, and is considering using a futures hedge to lock in a price. Which maturity should she use?
a. December 2020 (expires Dec. 15)
b. March 2021 (expires Mar. 15, 2021)
c. May 2021 (expires May, 2021)
d. Not enough information
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