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The hedging performance in new agricultural futures markets: A note
Author(s) -
Pennings Joost M. E.,
Meulenberg Matthew T. G.
Publication year - 1997
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/(sici)1520-6297(199705/06)13:3<295::aid-agr4>3.0.co;2-w
Subject(s) - futures contract , economics , financial economics , agriculture , econometrics , futures market , geography , archaeology
Agribusiness companies and farmers must cope with the risk of price changes when buying or selling agricultural commodities. Hedging price risk with agricultural commodity futures offers a way of minimizing this risk. Information is needed on the hedging effectiveness of these futures. Because many new agricultural futures markets, especially those in Europe, are thin markets, hedgers face liquidity risks which have to be taken into account when evaluating hedging effectiveness. © 1997 John Wiley & Sons, Inc.