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Hedging Relationship
A risk management strategy where two or more financial instruments are used together to offset potential losses in investments.
Hedged Item
A recognized asset or liability, unrecognized firm commitment, or highly probable forecast transaction in a hedging relationship.
Hedge Effectiveness
The degree to which a hedge transaction reduces the risk of fluctuations in the cash flows or value of an underlying exposure.
Hedge Effectiveness
A measure of how well a hedge transaction reduces the risk of the exposure that the hedge was intended to protect against.
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