Hedging
Hedging is a transaction that lowers a firm's risk of damage due to fluctuating commodity prices, interest rates, and exchange rates.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Hedging. A transaction that lowers a firm's risk of damage due to fluctuating commodity prices, interest rates, and exchange rates.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Hedging. Using transactions to lower risk.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
