Hedging Flashcards
1
Q
what is hedging?
A
a way of attempting to insure against a negative event happening
e.g., purchasing car insurance
2
Q
impact of hedging
A
reduces the negative impact of negative events that may occur
3
Q
example of a form of hedging in finance
A
getting derivatives (e.g., futures, swaps etc) to protect against uncertain future events
