AGR453 - CHAPTER 2

Accepting of possibility losses in agricultural marketing during the holding period is also known as

• Risk avoidance

• Risk bearing

• Risk transferring

• Risk averse

Economic risk can be divided into ________ and ______

• Physical risk

• Financial risk

• Market risk

• Hazard risk

Approaches in transferring risk in marketing involves (choose more than 1 answer)

• Contract

• Speculating

• Hedging

• Insurance

All sellers and buyers that enters futures contract have to go through

• stock exchange

• bank

• clearing house

• financial institution

he party who agrees to deliver a commodity will enter _____ position

The party who agrees to receive a commodity will enter ________ position

The buyers of the commodity are trying to secure as low a price as possible is called the _______

The buyers/sellers that attempt to gain profit from futures price movement and do not aim to minimize risk is called ________

What would a hedger choose? (2 correct answers)

• Short position - Secure a price now in anticipation of rising prices

• Long position - Secure a price now in anticipation of declining pricesLo

• Short position - Secure a price now to protect against future declining prices

• Long position - Secure a price now to protect against future rising prices

What would a speculator choose? (1 correct answers)

• Long position -Secure a price now in anticipation of rising prices

• Long position - Secure a price now in anticipation of declining prices

• Short position - Secure a price now to protect against future declining prices

• Long position - Secure a price now to protect against future rising prices