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What Is the Difference Between Hedgers and Speculators in the Futures

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Essay

What is the difference between hedgers and speculators in the futures markets?


Definitions:

Reinvested

The act of using dividends, interest, or any form of returns to purchase additional shares or assets rather than taking cash.

Present Value

The current financial evaluation of receiving a sum of money or series of payments in the future, discounted by a pre-determined return rate.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in capital budgeting.

Future Cash Flows

Projected cash payments or receipts over a future period, crucial for evaluating investments and financial planning.

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