Hedging with Forwards and Futures
{"Image DocumentName": "Hedging with Forwards and Futures", "Image ImageDescription": "Ex - Kellogg produces cereal. A major component and cost factor is sugar. Forecasted income & sales volume is set by using a fixed selling price. Changes in cost can impact these forecasts. To fix your sugar costs, you would ideally like to purchase all your sugar today, since you like today\u2019s price, and made your forecasts based on it. But, you can not. You can, however, sign a contract to purchase sugar at various points in the future for a price negotiated today. This contract is called a Futures Contract. This technique of managing your sugar costs is called Hedging.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}