The Farmer and the Baker Jamela has made a loss of S20,000 on her trade in the hypothetical wheat forwards market She recovers this loss when she sells her wheat This is a true hedge.She has lost the opportunity to participate in a rise in the price of wheat in return for down-side protection Not protecting the up-side risk exposure THE COURSE OF FINANCE 2017 SPRING SJTU 13The Farmer and the Baker  Jamela has made a loss of $20,000 on her trade in the hypothetical wheat forwards market  She recovers this loss when she sells her wheat This is a true hedge. She has lost the opportunity to participate in a rise in the price of wheat in return for down-side protection Not protecting the up-side risk exposure THE COURSE OF FINANCE 2017 SPRING SJTU 13