Hedging is applicable in all cases regardless of the purpose being to maximize profit or to protect against loss of value as a result of various factors such as currency fluctuation in the transaction involving an underlying real asset.

Question

Quizplus · Accepted Answer

Hedging is primarily used to protect against losses from fluctuations in prices or currencies, not to maximize profit. Its main purpose is risk management, not profit generation.

Hedging Is Applicable in All Cases Regardless of the Purpose