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BUS450 Week 3 dq 1 Hedging

BUS450 Week 3 dq 1 Hedging

1 st Posting Due by Day 3. Hedging. There are some risks involved with international transactions due to fluctuations of the foreign currency exchange rates. One way to mitigate those risks is through hedging. Discuss the hedging options: forward contracts and option contracts. What are the advantages and disadvantages of each alternative? What are the costs of each alternative? When is one alternative preferred over the other alternative? Respond to at least two of your classmates’ postings




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            A hedge or hedging is an investment taken to reduce the risk in an investment. There are various hedging options. The first option is equity hedging means that an investor can hedge individual stock buy buying the stock provided at the stock. The second hedge is the future stock hedging. This means that a trader can hedge a futures position against…


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