AREC 384 risk management/commodity futures

risk

uncertainty that (negatively) affects and individual's utility
examples of mitigating risk
- diversify business activities
- purchase crop insurance
- forward pricing
- futures market
futures market

market for future delivery of a particular product at a particular place, price, and/or time
cash market
- aka spot market
- "present" market
- simultaneous agreement on price and product delivery
roles of futures market
- price discovery
- risk shifting
- facilitate financing

Author

hcunning

324928

Card Set

AREC 384 risk management/commodity futures

Description

lecture 10

Updated

2016-10-26T00:24:29Z

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