Interested to Buy Any Domain ? << Click Here >> for more details...
what is hedging? what is funding? what is deriveatives
market in a lay man language?
- 1 Answers
- 7633 Views
- HDFC, I also Faced
- E-Mail Answers
Answer Posted / samir
Hedge:
Making an investment to reduce the risk of adverse price
movements in an asset. Normally, a hedge consists of taking
an offsetting position in a related security, such as a
futures contract
Funding Agreement:
Funding agreements are marketed to mutual fund companies
and municipal reinvestments. These products are generally
used for their security and flexibility as they can be
altered to meet the specific cash-flow needs of the
contract holder.
Derivative:
In finance, a security whose price is dependent upon or
derived from one or more underlying assets. The derivative
itself is merely a contract between two or more parties.
Its value is determined by fluctuations in the underlying
asset. The most common underlying assets include stocks,
bonds, commodities, currencies, interest rates and market
indexes. Most derivatives are characterized by high
leverage.
Derivatives are generally used to hedge risk, but can also
be used for speculative purposes. For example, a European
investor purchasing shares of an American company off of an
American exchange (using American dollars to do so) would
be exposed to exchange-rate risk while holding that stock.
To hedge this risk, the investor could purchase currency
futures to lock in a specified exchange rate for the future
stock sale and currency conversion back into euros.
| Is This Answer Correct ? | 10 Yes | 1 No |
Post New Answer View All Answers
What is 'public account fund'?
What does money laundering involve?
What Are Redeemable Debentures.?
What Is Investment Management System?
What is IFSC Code and why is it used?
Tell something about surgical strikes?
What are the different types of taxes imposed by the government?
What is 'consolidated fund'?
what are the interview question for housing finance companies in credit department.
One of the measures taken by RBI, open market operations in order to control credit expansion in the economy means?
What do you know about the Banking Sector?
What is a fixed deposit? (min and max periods for the same.)
How To Create A Organizational Group?
Electronics has given technologies to bank. What are they? Explain?
What are the first 30 companies in BSE and what are the first 50 companies in NSE
