Discusstion

Read “John Carter: Hedging” beginning on page 789 and analyze the following questions:

John Carter was afarmer in NorthernMassachusetts. John,like all of the farmersaround him, grewapples and shipped hisharvest to Boston for sale at the prevailing marketprice. The farm had been in John’s family for threegenerations; from his inheritance and prudentmanagement, John had built his net worth to$300,000. Like many of his neighbors, John was beingpressed by increasing costs and by the failure ofrevenues to keep up with this increase. John worriedthat a really bad year could wipe him out and he mightlose the farm.