In nearly all cases, the purpose of a hedge is to
A) reduce or eliminate risk.
B) make a very high profit in an extremely short time frame.
C) speculate on a downward drop in a general market index.
D) speculate on an upward movement in a given currency.

Question

Quizplus · Accepted Answer

Hedges are primarily used to reduce or eliminate risk associated with price movements in the market, not for speculation or achieving high short-term profits.

In Nearly All Cases, the Purpose of a Hedge Is