Transaction Frequency and Hedging in Commodity Processing
| dc.creator | Dahlgran, Roger A. | |
| dc.date | 2017-04-01T18:55:01Z | |
| dc.date.accessioned | 2026-07-09T04:11:23Z | |
| dc.description | This study examines the effect of transaction frequency on profit and cash flow risk for firms that periodically purchase inputs, continuously transform inputs into outputs, and periodically sell output. Soybean-processing profit and cash flows are computed for unhedged, direct-hedged, and risk-minimizing-hedged processing with up to 52 transactions per year. Findings include: (a) higher transaction frequencies result in lower unhedged profit and cash flow risk and lower hedging effectiveness, (b) anticipatory hedging provides less risk protection than product-transformation hedging, (c) stabilizing cash flow stabilizes annual profits but the converse does not hold, and (d) hedging profits makes cash flow more variable. | |
| dc.identifier | doi:10.22004/ag.econ.30985 | |
| dc.identifier | https://ageconsearch.umn.edu/record/30985/files/30030411.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/30985 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/546154 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/30985 | |
| dc.title | Transaction Frequency and Hedging in Commodity Processing | |
| dc.type | Text |