In nearly all cases, the purpose of a hedge is to
A) speculate on a downward drop in a general market index.
B) speculate on an upward movement in a given currency.
C) reduce or eliminate risk.
D) make a very high profit in an extremely short time frame.

Question

Quizplus · Accepted Answer

The primary purpose of a hedge is to reduce or eliminate risk by taking an offsetting position in a related asset.

In Nearly All Cases, the Purpose of a Hedge Is