Final answer:
A valid strategy for hedging exposure to price volatility in the steel market is to hold (buy) put options on steel. By purchasing put options, a company can protect themselves from potential price increases and mitigate the risk of price volatility. Option number b is correct.
Step-by-step explanation:
A valid strategy for hedging exposure to price volatility in the steel market would be to hold (buy) put options on steel.
By purchasing put options, Delta Construction Corporation would have the right to sell steel at a predetermined price, known as the strike price, thereby protecting themselves from potential price increases. If the price of steel does increase, the put options would allow Delta Construction Corporation to sell the steel at the higher market price and profit from the difference.
This strategy helps mitigate the risk of price volatility and provides a level of financial security for Delta Construction Corporation.