Define an example to Hedge
Define an example to Hedge?
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You buy a call option, this could go up or down in value depending upon whether the underlying goes up or down. Therefore now sell some stock short. When you sell the right amount short then any rises or falls in the stock position will balance the falls or increases in the option, decreasing risk.
Why might it be easier for an investor wishing to diversify his portfolio internationally to purchase depository receipts instead of the actual shares of the company?A depository receipt can be purchased on the investor's domestic exchange. It
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In order for a derivatives market to function two kind of economic agents are required: hedgers & speculators. Describe.Two kinds of market participants are essential for the operation of a derivatives market: speculators & hedgers.
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