You are the accounts manager at a bank which supplies credit to a portfolio of farmer clients.
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Question:
You are the accounts manager at a bank which supplies credit to a portfolio of farmer clients. The head of the Agricultural Economics division in the bank is very worried that if the bank makes loans to the farmers this year, they will not be able to pay the bank back next year.
His concern is that due to the problem with the war in Europe, markets and also commodity markets may crash, and if the grain prices fall too low the farmers will not be able to service their loans. As a top graduate from the University of Pretoria you know something about hedging and decide to give him a quick 5-marks crash course on hedging.
What do you tell him?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: