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Derivatives and Risk Management, 1st Edition
book

Derivatives and Risk Management, 1st Edition

by Sundaram Janakiramanan
May 2024
Intermediate to advanced content levelIntermediate to advanced
542 pages
27h 26m
English
Pearson India
Content preview from Derivatives and Risk Management, 1st Edition
Hedging Strategies Using Futures 119
C H A P T E R S U M M A R Y
 e major participants in a futures market are hedgers.
A perfect hedge is achieved when the price risk is completely
eliminated and the hedger is able to lock in a known price for the
exchange of an asset at a future time. A long hedge is undertaken
when a person needs to buy the underlying asset in the future.
A long hedge involves buying the futures at the current time.
For a long hedger, the concern is that the price of the underly-
ing asset may increase in the future, thereby requiring them to
pay a higher price when they need to buy the asset
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Publisher Resources

ISBN: 9781299447547Publisher Website