Perfect hedge
Perfect hedge is a hedge in which the gain or loss on the hedged transaction exactly offsets the loss or gain on the unhedged position.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Perfect hedge. A hedge in which the gain or loss on the hedged transaction exactly offsets the loss or gain on the unhedged position.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Perfect hedges. Occurs when the gain or loss on the hedged transaction exactly offsets the loss or gain on the unhedged position.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
