hedging tools & derivitives in globalisation (1 Viewer)

[Gelapo]

whats the difference btween the two?
tho i've red thru diffrent txtbooks, they seem like the same thing.

 

[truly-in-bliss]

hedging is lyk the big tree
derivaties is lyk a type of hedging... hence the lil branch

 

[aussiechica]

Thats so weird- I asked that exact same question on here ages ago! the answer that clear it up for me (by truly-in-bliss ) was:

There are 2 types of hedging: natrual and fiancial instrument hedging. Derivatives is one example of financial instrument hedging.

 

[truly-in-bliss]

heyaussiechicka....u asked this b4...

http://www.boredofstudies.org/community/showthread.php?s=&threadid=9579

 

[aussiechica]

And YOU were my saviour. My my , where would we be without you

 

[truly-in-bliss]

hahha.....but u forgot ur stuff! hahah..

 

[aussiechica]

I know- my memory is tragic. im like Dory from Finding Nemo.

Im just past saving, oh saviour

 

[truly-in-bliss]

lol..yeah my memeori is relaly bad as well..

 

[yang]

hedging is entering contracts at the present time to buy or sell foriegn exchange at a specific rate on a given date.to avoide any changes to the exchange rate in the future since exchange rate is always changing
Derivatives is instruments used to calculate the exchange rate

 

[nerdd]

huhhhh??

wtf?

hedging is just the process of actively taking steps to minimise risks experienced due to currency fluctuations.

derivates are financial instruments, which are STEPS TAKEN TO MINIMISE RISK

3 types:

options contract
forward exchange contract
swap contract

post again if you need me to explain those three.