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Given a 25% Chance of a 600,000 Bushel Yield and a 75

Question 10

Multiple Choice

Given a 25% chance of a 600,000 bushel yield and a 75% chance of a 500,000 bushel yield,what quantity should the farmer hedge in order to protect against an uncertain harvest? Assume the farmer is willing to take reasonable risk.


A) 0
B) 500,000
C) 525,000
D) 600,000

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