..................... is a mechanism to reduce price risk inherent in open position.
Hedging
Hedging means taking an offsetting position in a related asset or derivative so that a loss on the open position is balanced by a gain on the hedge.
Its purpose is to reduce or eliminate the price risk that arises when a trader or firm holds an open (unhedged) position in a commodity, currency or security.
A swap is an exchange of cash flows, a customised contract is merely a tailor-made forward agreement, and squaring off simply closes a position rather than protecting it against price movement.
Hence, Hedging.
Similar Questions
A producer when supplies particular goods and commodities to specified distributors and guarantees not to supply other distributors in a given region is termed as ................. .
Under the provisions of section ................ of the Banking Regulation Act, the SLR is applicable to scheduled banks.
Which of the following is appliable for inter-state sale ?
Under the constitution, Finance Commission :
(X) It is to be constituted every fifth year.
(Y) It can be constituted when President considers necessary.
Which theory postulates that countries will export those goods that make intensive use of factors that are locally abundant, while import goods that make use of factors that are locally scarce ?
Match the columns :
Group A Group B (a) Mercantilism (1) Heckscher-Ohlin (b) Theory of Absolute Cost Advantage (2) David Ricardo (c) Comparative Cost Advantage Theory (3) Adam Smith (d) Factor Endowments Theory (4) Maintaining Favourable BOP Codes :
(a) (b) (c) (d)
Which of the following is not a type of BOP disequilibrium ?
Which of the following countries was not a member of SAARC when it was established in 1985 ?
Which one of the following is not a function of International Monetary Fund (IMF) ?
Management audit is an extension of .................... .
Important Questions from Mixed Topic (MH-SET)
.................... is a client server application that identifies each host on the internet with a unique user-friendly name.
Every OS has a ................ or .......... which primarily resides in the main memory of the computer to perform some of the basic functions of the OS.
(i) Kernel
(ii) Interface
(iii) Nucleus
(iv) Compiler
Codes:
Which of the following are referred to as low level language?
(i) Machine language
(ii) Assembly language
(iii) High level language
(iv) Natural language
Codes:
Match the following:
List I List II (a) New York Public Library (i) Shelv AR (b) Miami University Augmented Research Group (ii) Smart library (c) Oula University Library (iii) Wolf Walk (d) North Carolina State University (iv) Find the future Codes:
Which part of the QR code represents the encoded data?
