Title: Identify the risks associated with futures contracts.
Course: Agricultural Business Management III (18201-36) > Section: Investigating Commodity Markets, Futures Markets, and Hedging Contracts

Identification should include

- explaining margin
- explaining leverage
- credit risk
- margin risk
- market risk
- volatility risk
- price risk.

Process/Skill Questions:

- Why do companies use future contracts?
- What is a futures’ contract, and why would an agribusiness want to enter into this type of a contract?
- What is a hedge, and why is this type of investment used by farmers?