Intertemporal Risk Management Decisions of Farmers under Preference, Market, and Policy Dynamics

Figure 8. Sensitivity of Optimal Hedge Ratios in Response to Transaction Cost

Year 1

With CCP

No CCP

Optimal Hedge Ratio

0.4230

0.4225

0.4220

0.4215

0.4210

0.4205

0.4200

0.4195

0.4190

о.

y Yrl (With CCP)

о Yrl (No CCP)

-■Linear (Yrl (With CCP))

Linear (Yrl (No CCP))

•ж

ζ^^v Ç?' ζy^,                    ςp⁴ PP Pv¹

ÿ’ 'ÿ 'ÿ c, 'ÿ c>^, c>^,
ç>- ç>- ç>- ç>- ç>- ç>- ç>- ç>- ç>-

<∙∙α.

×    <Γ'⅛₄

ж <>■
ж

0.6120

0.6115

0.6110

0.6105

0.6100

0.6095

0.6090

0.6085

0.6080

_cΛ- A Λ √⅛ √× √⅛ √b Л A Λ r<V
C?³ ς? ς? ς? ς? ς? ς? ς? ς? ς? _cλ.^4d
43 ç>- ç>- ç>- ç>- ç>- ç>- ç>- ç>- ç>- ⁴³

Transaction Cost ($)

43