Hedging: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Administrator (CSV import) |
imported>Doug Williamson m (Spacing 27/8/13) |
||
| Line 1: | Line 1: | ||
1. | 1. | ||
Traditionally hedging refers to the process whereby a firm uses financial instruments (such as forward contracts, futures contracts or options) or other techniques to reduce the impact of fluctuations in such factors as the market price of credit, foreign exchange rates, or commodity prices on its profits or corporate value. | Traditionally hedging refers to the process whereby a firm uses financial instruments (such as forward contracts, futures contracts or options) or other techniques to reduce the impact of fluctuations in such factors as the market price of credit, foreign exchange rates, or commodity prices on its profits or corporate value. | ||
2. | 2. | ||
More recently the application of hedging techniques has been extended to the management of many other risks including for example inflation and longevity risk arising in pension funds. | More recently the application of hedging techniques has been extended to the management of many other risks including for example inflation and longevity risk arising in pension funds. | ||
== See also == | == See also == | ||
| Line 27: | Line 31: | ||
* [[Underhedging]] | * [[Underhedging]] | ||
* [[Warehousing]] | * [[Warehousing]] | ||
Revision as of 11:10, 27 August 2013
1.
Traditionally hedging refers to the process whereby a firm uses financial instruments (such as forward contracts, futures contracts or options) or other techniques to reduce the impact of fluctuations in such factors as the market price of credit, foreign exchange rates, or commodity prices on its profits or corporate value.
2.
More recently the application of hedging techniques has been extended to the management of many other risks including for example inflation and longevity risk arising in pension funds.
