Risk Management

____________ risk occurs from the uncertainty of market prices, or the price producers will receive for

their commodities.

• Production

• Price

• Institutional

• Financial

What is institutional risk?

• Uncertainty of factors that affect the growth of crops and livestock.

• Issues dealing with people and relationships.

• Uncertainty surrounding government policies and programs.

• When a business borrows money and is obligated to repay debt

Which of the following are examples of production risk?

• Weather

• Disease

• Pests

• All of the Above

Risk is the possibility of harm or loss, which exists due to the lack of knowledge about the future.

• True

• False

Producers have only one option to manage the risks they face.

• True

• False

An insurance policy is an example of one risk management tool

• True

• False

Rising interest rates are an example of financial risk.

• True

• False

_________________________________ is anticipating possible challenges and creating a plan to reduce their consequences.