The image above contains information about futures contracts as reported by the Wall Street Journal on August 11, 2023. Suppose that today is August 11, 2023, and your palladium mining company expects to sell $2,550,000 worth of palladium in September 2023. You would like to lock in your selling price today because you are concerned that palladium prices may drop between now and September. The beta estimate between palladium and gold is 1.2.

Which of the followings is the most effective hedging strategy that your company should implement today?

A.Short 1953 palladium (NYM) futures contracts maturing in Sept B.Long 16 gold (CMX) futures contracts maturing in Sept C.Long 1953 palladium (NYM) futures contracts maturing in Sept D.Short 39 palladium (NYM) futures contracts maturing in Sept E.Long 39 palladium (NYM) futures contracts maturing in Sept F.Short 16 gold (CMX) futures contracts maturing in Sept Futures Contracts