The buyer of a forward contract on wheat beneﬁts if the price of wheat _____ while the seller of the contract beneﬁts if the price of wheat _____.

Question

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In a forward contract on wheat, the buyer agrees to purchase a certain amount of wheat at a future date and a specified price. If the price of wheat increases in the future, the buyer will benefit because they can purchase the wheat at a lower price than the market price. The seller, on the other hand, would have to sell the wheat at a lower price than the market price, resulting in a loss. Therefore, the seller benefits if the price of wheat decreases while the buyer benefits if the price of wheat increases.

The Buyer of a Forward Contract on Wheat Beneﬁts If