An agricultural cooperative, Ceres Harvest, enters into a contract to sell its upcoming autumn grain harvest to an international distributor at a pre-agreed price in six months' time, thereby hedging against the risk of falling market prices.
Which of the following core functions of the financial sector is directly demonstrated by this transaction?
Facilitating the exchange of goods and services
Providing forward markets in commodities
Providing a market for equities
Facilitating saving by firms
18 exam-style questions on OCR A Level Economics The financial sector. Each one has a worked solution and a mark scheme showing where the marks go.