HEDGING RISK FOR FEEDER CATTLE WITH A TRADITIONAL HEDGE COMPARED TO A RATIO HEDGE
| dc.creator | Elam, Emmett W. | |
| dc.creator | Davis, James | |
| dc.date | 2017-04-01T18:13:42Z | |
| dc.date.accessioned | 2026-07-09T04:07:30Z | |
| dc.description | This paper compares hedging risk for various weights of feeder cattle hedged with a traditional cross hedge and a ratio cross hedge. A traditional hedge calls for the purchase/sale of one pound of futures for each pound of cash feeder cattle. By contrast, a ratio hedge requires estimation of a hedge ratio to determine the number of pounds of futures needed to hedge one pound of cash feeder cattle. Hedge ratios were found to be larger than 1.0 for light-weight feeder cattle. By using the estimated hedge ratios, it was shown that hedging risk could be reduced 20-50 percent compared to that achieved by using a hedge ratio of 1.0. | |
| dc.identifier | doi:10.22004/ag.econ.30012 | |
| dc.identifier | https://ageconsearch.umn.edu/record/30012/files/22020209.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/30012 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/545182 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/30012 | |
| dc.title | HEDGING RISK FOR FEEDER CATTLE WITH A TRADITIONAL HEDGE COMPARED TO A RATIO HEDGE | |
| dc.type | Text |