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Needs help with 5,6,7. I have the top 4. Elevators and processors use a number of different types of contracts when they purchase commodity. The
Needs help with 5,6,7. I have the top 4.
Elevators and processors use a number of different types of contracts when they purchase commodity. The contracts are a tool they can use to make secure commodity delivery to them when they need it. These contracts are different from futures or options in that it is not possible to offset a contract with an elevator or processor. They are all tools that producers can use to manage their price risk For each of the following contracts explain how the contract works. Describe the advantages and disadvantages to the commodity seller (producer) of each of these types of contracts. Please use appropriate terminology in your explanations. 1. Cash Forward Contract 2. Delayed Price Contract (AKA No Price Established or Deferred Price) 3. Storage Contract 4. Minimum Price Contract 5. Futures Fixed or Hedge to Arrive Contract 6. Basis or Basis Fixed Contract 7. Min-Max ContractStep by Step Solution
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