Example Derivatives provide insurance You earn $1 if your family s corn sells for a low price this supplement your Income Your friend earns $1 if the corn his family bought is expensive this offset the high cost of corn Charles cao 6Charles Cao 6 Example ◼ Derivatives provide insurance ◼ You earn $1 if your family’s corn sells for a low price; this supplement your income ◼ Your friend earns $1 if the corn his family bought is expensive; this offset the high cost of corn