The prudent use of derivatives to reduce investment risk, is not similar to the concept of ________________.
A) gambling
B) risk aversion
C) insurance
D) hedging

Question

Quizplus · Accepted Answer

The prudent use of derivatives to reduce investment risk is similar to the concepts of risk aversion, insurance, and hedging, as all these strategies aim to manage or mitigate risk. Gambling, on the other hand, typically involves taking on risk with the hope of achieving a return, making it dissimilar to the risk-reducing strategies mentioned.

The Prudent Use of Derivatives to Reduce Investment Risk, Is