Reducing or eliminating an exposure to risk using futures or forwards is best described as:
A) a hedge.
B) securitization.
C) collateralization.

Name: Reducing or eliminating an exposure to risk using futures or forwards is best described as: A) a hedge. B) securitization. C) collateralization.
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Question

Quizplus · Accepted Answer

A hedge is a financial strategy designed to reduce or eliminate the risk of adverse price movements in an asset, often achieved through the use of derivatives such as futures or forwards.

Reducing or Eliminating an Exposure to Risk Using Futures or Forwards