White Paper

4 Pages
  • 4 Pages

What Is Hedging?

 

Gain insight into hedging strategies.

Before someone can understand what hedging is, it is important to understand the concept of risk. Risk itself means different things to different people and companies. For some, risk speaks to the performance of a function relative to a benchmark. Hedging refers to the process of mitigating adverse outcomes caused by exposure to fluctuating, market-driven inputs. These inputs could be interest rates, exchange rates, or commodity prices. This white paper explains how risk and hedging work together and offers tips on hedging strategies.