The correct answer is C: "Hedging liabilities by rolling forward futures contracts may create cash flow mismatches." This is illustrated by the case of Metallgesellschaft in 1993, a classic example of a cash flow mismatch due to margin calls. The company had engaged in a strategy of hedging its long-term oil and gas contracts by using short-term futures contracts. However, as the futures contracts approached expiration, they had to be rolled over into new contracts. This created a situation where the company faced margin calls and potential liquidity issues as the short-term futures contracts did not align with the long-term cash flows of the underlying assets. This case highlights the importance of understanding the risks associated with hedging strategies and the potential for cash flow mismatches when using futures contracts to hedge liabilities.