Username: BobM Rating: Asked to: Jacob Rogers Date Created: 24 Jun 2016 |
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Category | 17 |
Tag | Financial |
Question | What is a 'Natural Hedge'? |
Hi BobM, A natural hedge is a method of reducing financial risk by investing in two different financial instruments whose performance tends to cancel each other out. A natural hedge is unlike other types of hedges in that it does not require the use of sophisticated financial products such as forwards or derivatives. However, most hedges (natural or otherwise) are imperfect, and do not eliminate risk completely. |
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