(Consider This)Which of the Following Methods Is Used by Farmers

question 68

Multiple Choice

(Consider This) Which of the following methods is used by farmers to "hedge" against short-run price and output fluctuations?

• A) Securing prices for their output in the futures market.
• B) Purchasing crop revenue insurance to insure against natural disasters.
• C) Leasing land to other farmers in return for stable rent payments.
• D) All of these risk-management techniques are used.

---

Definitions:

Loan Agreement

A legal contract between a borrower and a lender outlining the terms and conditions of a loan.

Creditor

An individual or institution to whom money is owed.

Technical Default

A failure to meet some specific terms of a loan agreement, lease, or another contract, other than the failure to make payments as and when they fall due.

Interest Payments

Payments made by a borrower to a lender, consisting of the cost of borrowing money over a period of time.