The cash position of a merchant is 10000 wheat bushels. The variance of the forward price is ² _F = 0.00094, the variance of the changes of the basis is ² = 0.000453, the variance of the changes of the cash price is ²_c = 0.000805 and the covariance of the changes of the forward price with the changes of the cash prices is _CF = 0.000518. Calculate the efficiency of hedging. SOLVE AND WRITE ME HOW YOU CAME UP WITH THE SOLUTION and choose one of the following:

a. 0.97

b. 0.31

c. 0.69

d. 0.03