Agribusiness Risk Management

Assessing the potential production gains of new technology is related to which type of risk?

• Production

• Price (Market)

• Financial

• Personal

Any risk associated with people and relationships can be labeled as:

• Production

• Price (Market)

• Financial

• Personal

Which of the following is the simplest precaution against financial, market and production risk?

• Having large cash reserves

• Always borrowing from the bank

• Purchasing yield protection crop insurance

• Converting a sole proprietorship to an LLC

Reducing risk by a farmer would most likely be associated with which of the following:

• Expanding the size of their specialty operation

• Hiring more labor

• Adding a new enterprise to the operation

• Purchasing more inputs

Purchasing revenue protection crop insurance is an attempt to reduce this type of risk:

• Price (Market)

• Production

• Financial

Which of the following is an example of legal risk?

• Change in regulations surrounding food production

• Change in consumers' tastes and preferences

• A change in interest rates

Becoming an LLC can reduce the business owner's _____________ risk?

• Price (Market)

• Institutional (Legal)

• Financial

• Human

• Production

Which of the following is not a market risk?

• Changes in input prices

• Changes in commodity prices

• Not being able to gain access to a market for a specialty crop

• Changes in breakeven price caused by yield changes

Risk management is a process by which a business:

• Identified potential risk exposure

• Prioritizes the risk face by the business

• Develops a plan to mitigate the exposure

• All of the above