Question
A farmer has purchased the seeds, machinery and other items needed to grow his wheat crop, which he will harvest in 6 months. He is
A farmer has purchased the seeds, machinery and other items needed to grow his wheat crop, which he will harvest in 6 months. He is considering using 6-month futures for wheat to protect his profits. He should:
a. Short a futures contract
b. Go long a futures contract
c. Buy call options on wheat
d. Do nothing because futures cannot help farmers
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Fundamentals Of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
13th Edition
978-0134083308, 013408330X
