At Risk owns a food processing business, he needs 1,000 tons of flour in three months’ time.
Mr. At Risk owns a food processing business, he needs 1,000 tons of flour in three months’ time. He is worried that the price of flour may increase and wants to hedge against price increases of flour. He can not locate a forward contract, future contract or option for flour. Mr. Risk decides to enter into an contract to buy 25,000 bushels of wheat. The […]