1. A futures contract is a legal contract for buying or selling a good or product at some point in the future. TRUE/FALSE

2. Commodity Exchanges provide a market environment of price transparency that allows price discovery to occur. TRUE/FALSE

3. Hedging is a risk management strategy that allows buyers and sellers to eliminate local market price risk but not global market price risk. TRUE/FALSE

4. Hedgers are traders in the commodity market that hold opposite positions in the cash and futures market. TRUE/FALSE

5. The risk management strategy of hedging of agricultural commodities is used to protect hedgers from both input and output price risk, but not production risk. TRUE/FALSE