Explain How Hedging Affects Risk and Return

question 61

Essay

Explain how hedging affects risk and return.Use a diagram to stress your points.In your answer differentiate between routine hedging and hedging selectively.

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Definitions:

Adaptive Cultures

Organizational cultures that are flexible and able to adjust quickly to changes in the external environment, promoting innovation and learning.

Stakeholders

Individuals or groups with an interest or concern in a business or project, including customers, employees, investors, and suppliers.

Assimilation Strategy

A method used by organizations to integrate individuals or groups into a prevailing culture or set of norms, often minimizing differences to create cohesion.

Corporate Cultures

The shared values, beliefs, and practices that characterize an organization and influence its members' behavior.