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Quantity Uncertainty Three corn producers (farmer A, B and C) are producing the amount of corns based on the corn price as follows: Assume that
Quantity Uncertainty Three corn producers (farmer A, B and C) are producing the amount of corns based on the corn price as follows: Assume that each price of corn and the quantity are equally likely to be occurred. (a) Find the unhedged revenue for farmer A; (b) Find the expected quantity hedged revenue and the variance-minimizing hedge ratio revenue for farmer B and farmer C; (c) Find the variability (standard deviation) for all the revenues; (d) Comment the revenue variabilities. Forward price is 1.5 dollar per bushel
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