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:

Interest Revenue

Interest revenue is the earnings a company generates from deposit accounts or from lending funds to other entities.

Auditor Opinions

Professional judgements issued by auditors at the conclusion of an audit, reflecting their assessment of the accuracy and fairness of a company's financial statements.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards for financial reporting and accounting practices in the United States.

Disclaimer of Opinion

An auditor's statement indicating inability to express an opinion on the fairness of financial statements due to limited information or uncertainties.