which of the following is a characteristic of the grain farmers option of deliver and sell at harvest but…

which of the following is a characteristic of the grain farmers option of deliver and sell at harvest but defer pricing? quick payment requirement of a futures contract involvement of financial risk of the elevators solvency guarantee of a higher price than sale at harvest none of the above

which of the following is a characteristic of the grain farmers option of deliver and sell at harvest but defer pricing? quick payment requirement of a futures contract involvement of financial risk of the elevators solvency guarantee of a higher price than sale at harvest none of the above

Answer

Brief Explanations:

When a grain - farmer defers pricing after delivering and selling at harvest, they are exposed to the financial risk of the grain elevator's solvency. The farmer is waiting for a future price determination, and if the elevator goes out of business in the meantime, the farmer may face losses. Quick payment is not a characteristic as payment is deferred. A futures contract is not required for this option. There is no guarantee of a higher price than selling at harvest.

Answer:

Involvement of financial risk of the elevator’s solvency