Abstract
Less Developed Countries (LDCs) are subject to variability of the income they derive from exportation of primary commodities. The associated risk arises from the variability of both prices and production. Fluctuating export earnings curtail LDCs’ economic growth especially when a limited number of goods is exported. This paper proposes futures and option contracts as efficient hedging instruments.
This paper is based on Parts III and IV of Ntamatungiro (1988). I am indebted to professors J.P. Danthine who directed this research and A. Holly for his help and encouragement.
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Ntamatungiro, J. (1991). Hedging Commodity Export Earnings with Futures and Option Contracts. In: Phlips, L. (eds) Commodity, Futures and Financial Markets. Advanced Studies in Theoretical and Applied Econometrics, vol 21. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-3354-8_2
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DOI: https://doi.org/10.1007/978-94-011-3354-8_2
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