Explain How the Purchase of Futures Contracts Can Help to Insure

question 59

Essay

Explain how the purchase of futures contracts can help to insure a farmer against adverse swings in the prices of the crops that he grows.

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Definitions:

Organizational Principles

Fundamental concepts or rules that guide the design, operations, and practices of an organization, ensuring its proper function and efficiency.

Primary Stakeholders

Individuals or groups that are directly affected by or have a direct interest in the actions and performance of an organization, such as employees, customers, and shareholders.

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns, often involving equity stakes or debt financing.

Core Capabilities

The unique strengths and abilities that give an organization a competitive advantage in its field or market.