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.

Practice Next

Relevant for Exams:

×
×