Final answer:
To hedge against barley price fluctuations, selling futures contracts is the most effective strategy to lock in a price, as option strategies do not provide a complete hedge. option b.
Step-by-step explanation:
To fully hedge your exposure to barley prices using futures contracts, the best method would be to take a position in the futures market that is opposite to your position in the physical commodity market. If you are holding barley and want to protect against a price drop, you would sell futures contracts to lock in the future selling price of the grain. While options can provide some level of protection, only by selling futures contracts can you fully hedge and fix your selling price. The correct choice among the provided options is b) Sell 3000 futures contracts. This creates a scenario where any loss from a decrease in the market price of barley would be offset by gains from the futures contracts, achieving a complete hedge.