Corn Is Currently Selling for $6

Corn is currently selling for $6.15 a bushel while the 3-month futures price is $6.20. Carl believes that corn will actually sell for $6.45 a bushel 3 months from now. Which one of the following positions in corn should he take today, given this belief?

A) sell in the spot market
B) sell in the futures market
C) take a long position in the futures market
D) take a short position in the futures market
E) take a short position in the spot market

Correct Answer:

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