Natural hedge
Natural hedge is a transaction between two counterparties where both parties' risks are reduced.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Natural hedge. A transaction between two counterparties where both parties' risks are reduced.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Natural hedges. Situations in which aggregate risk can be reduced by derivatives transactions between two parties known as counterparties.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
