AREC 384 risk management/commodity futures

  1. risk
    uncertainty that (negatively) affects and individual's utility
  2. examples of mitigating risk
    • diversify business activities
    • purchase crop insurance
    • forward pricing
    • futures market
  3. futures market
    market for future delivery of a particular product at a particular place, price, and/or time
  4. cash market
    • aka spot market
    • "present" market
    • simultaneous agreement on price and product delivery
  5. roles of futures market
    • price discovery
    • risk shifting
    • facilitate financing
Author
hcunning
ID
324928
Card Set
AREC 384 risk management/commodity futures
Description
lecture 10
Updated