EBF 301 EBF301 Lesson 9 Assignment (Penn State University)
EBF 301 EBF301 Lesson 9 Assignment (Penn State University)
Lesson 9: Basic Energy Risk “Hedging” using Financial Derivatives
At the successful completion of this lesson, students should be able to:
• Understand how price risk reduction can occur through the use of basic financial derivatives
o NYMEX contracts
o “Forwards’
• Understand how commodity risk can be reduced
• Demonstrate a simple “hedge” structure for:
o Energy commodity Producers
o Energy commodity Consumers
o Storage
