Risk Neutrality is conceptually the inverse of Risk & Return, it is a critical concept for arbitrage issues in corporate lending to the agricultural market. When playing heads and tails, we toss a coin. Let's say we gain if we have heads and lose in the case we have tails. There is a 50% chance of winning or losing. The gain is 100 if we win and - 50 if we lose. The expected gain is 0.05 x 100 + 0.5 x (-50) = 25. A risk neutral player is, by definition indifferent. Between a certain outcome of 25 and this uncertain outcome. A risk-averse investor is not. He might prefer to hold 20 for sure than betting. The difference between 25 and 20 is the value of risk aversion. Since, investors are risk averse, we need to adjust expectations for risk aversion. For the sake of simplicity, arbitrage for the conservative non risk neutrality investor or institution is all about risk and return. For Agribusinesses being conservative is essential to survival since supply and demand is interlinked with all commodities, currencies, political influences, trade, tariffs, exports and imports.
The Agricultural Business after fluctuating prices, cost of goods, labor, and production and after it repays its bank debt if lucky has a return on asset at 3.5%
After 24 years of research and development and negotiations with our ally MERCOSUR, our latest technology allows return on investments to be transcribed accurately via satellite. How is this?
The satellite panels use artificial intelligence to predict the trajectories of price fluctuations in commodity markets utilizing transmission control protocol over a satellite up link. It is a rather sophisticated technology only available to Agrilend Members and creates many more operating efficiencies by way of prediction.
How can prediction help a farmer? Let us observe the Food Spots traded on the international exchanges depicted on the diagram below. If you were a farmer in 1986 buying grains to sell, would it not be nice to buy at the 200 mark and sell at the 290 mark? Becoming an Agrilend Member has many advantages and benefits aside from favorable capital investment, trade, export, import, and tariffs. It also provides technologies not yet available to the average farmer and influence along with insights. Please feel free to contact me at robertmorgan@agrilend.co or visit our site at www.agrilend.co for more info on memberships.
Article Added
Jun 18, 2018
Agrilend uses Emerging Technologies to provide the highest returns to Agricultural Investors.
Risk Neutrality is conceptually the inverse of Risk & Return, it is a critical concept for arbitrage issues in corporate lending to the agricultural market. When playing heads and tails, we toss a coin. Let's say we gain if we have heads and lose in the...
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