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      Question

      A protection against financial losses in the future is

      called:
      A hedging Correct Answer Incorrect Answer
      B Arbitrage Correct Answer Incorrect Answer
      C Speculation Correct Answer Incorrect Answer
      D Term Insurance Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      A hedger is a person or a fund that hedges, basically. A hedge can be defined as protection against financial losses in the future. There are so many financial products that help hedge against any kind of financial loss. For example, a fund can hedge against inflation, which will reduce the value of the cash holdings, by buying commodities such as gold. Since gold is considered a natural hedge against inflation.

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