Question

hedging, or reducing risk, is the same as adding value or return to the firm. group of answer choices true false

Answer 1

false Hedging, or lowering risk, is the same as increasing the firm's value or return.

How might currency risk be reduced through hedging?

hedging to reduce the risk of currency loss. Foreign exchange risk is an unavoidable reality for businesses doing business in other countries, although hedging can help reduce the risk. By taking a contrary position in a comparable asset, the hedging technique seeks to reduce risks associated with financial assets.

What does hedge mean?

A approach for reducing the risks associated with financial assets is hedging. It uses market tactics or financial instruments to reduce the risk of any unfavorable price changes. To put it another way, investors use a trade in another investment to protect one investment.

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