Finance pp 164-171 | Cite as

Hedging

  • Gregory Connor
Part of the The New Palgrave book series (NPA)

Abstract

Hedging is the purchasing of an asset or portfolio of assets in order to insure against wealth fluctuations from other sources. A hedge portfolio is any asset or collection of assets purchased by one or more agents for hedging. A grain dealer may hedge against losses on an inventory of grain by selling grain futures; a Middle Eastern businessman may hedge against political turmoil (and the resulting losses) by buying gold; a pension fund may hedge against capital losses on its equity portfolio by buying stock index put options.

Keywords

Covariance Income Assure Expense Hedging 

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Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1989

Authors and Affiliations

  • Gregory Connor

There are no affiliations available

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