Definition for : Hedging

When an investor attempts to protect himself from risks he does not wish to assume he is said to be hedging. The term "to hedge" describes a general concept that underlies certain Investment decisions, for example, the decision to match a long-term Investment with long-term financing, to finance a risky industrial Investment with Equity capital rather than borrowed capital, etc. See also Hedging principle.

(See Chapter 15 The financial markets of the Vernimmen)

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