13. Hedging strategies [LO 23.1] For the following scenarios, describe a hedging strategy using futures contracts that might be considered. If you think that a crosshedge would be appropriate, discuss the reasons for your choice of contract.

1. A public authority is concerned about rising costs.

2. A chocolate manufacturer is concerned about rising costs.

3. A corn farmer fears that this year’s harvest will be at record high levels across the country.

4. A manufacturer of photographic film is concerned about rising costs.
5. A natural gas producer believes there will be excess supply in the market this year.
6. An equity mutual fund invests in large-company blue-chip shares and is concerned about a decline in the share market.
7. An Australian importer of Swiss Army knives will pay for its order in six months in Swiss francs.
8. An Australian exporter of construction equipment has agreed to sell some cranes to a German construction firm. The Australian firm will be paid in euros in three months.