Lynn has hedged his soybeans based on predicted production of 50 bushels per acre. He also contracted to purchase all his materials, supplies, and other inputs at a good price to produce the crop. Under which of the following conditions would Lynn be in trouble?

Lynn has hedged his soybeans based on predicted production of 50 bushels per acre. He also contracted to purchase all his materials, supplies, and other inputs at a good price to produce the crop. Under which of the following conditions would Lynn be in trouble?



Answer: The market price at harvest time is double what he hedged the beans for and he makes 30 bushels per acre


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