A business that offsets risk through its own operations rather than a …

Question

A business that offsets risk through its own operations rather than a market instrument uses a:

Accepted Answer

D. Natural hedge

1. No contract needs to be bought.
2. Costs and revenues already offset each other.
3. That is a natural hedge.
_Source: OpenStax Principles of Finance, Chapter 20, Risk Management and the Financial Manager._

Answer

Neutral hedge

Answer

Nominal hedge

Answer

Notional hedge

A business that offsets risk through its own operations rather than a market instrument uses a:

Keep practising Risk Management and Hedging