This is the classic, but difficult idea, that offers an explanation for why we expect the forward price to be less than the expected future spot price: F less than E[future spot]. The key to the theory is the assumption that hedgers are, on average, taking short positions (e.g., a corn farmer needs to *short* because he/she plans to sell the commodity in the future). For more financial risk videos, visit our website! [ Ссылка ]
