What is Hedging Process?


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HEDGING PROCESS :

Hedging can be defined as a process or mechanism of reducing, minimizing or eliminating

risk from a given transaction. A foreign exchange exposure is hedged or covered when the

company takes certain steps to insulate itself from the adverse effects of exchange rate

movements. The basic objective in hedging is to create a position in the foreign currency in

the direction opposite to the one that exists so that ultimately the balance or net effect

becomes zero. Hedging may be achieved through internal or external mechanisms.


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MT UVA BMS

MT UVA- University, Vocational and Affiliated Education for BMS

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