What is natural hedge?

Q: what is an available-for-sale security?

A: Securities are financial instruments that can be traded easily. The entities use these securities to…

Q: Define asset-backed security

A: Answer: Asset backed security is nothing but a security is made up of other financial securities.…

Q: What is meant by a dilutive security?

A: Dilutive security is a type of investment security that helps the company increase its equity…

Q: Define default risk

A: Default risk: It is the threat or risk of a bank taking on the plausibility that a borrower will not…

Q: What is a derivative security?

A: Financial Instruments: It represents assets that are traded in the financial markets and are…

Q: Risk management focuses on what?

A: Organizations assess the stakeholder’s responses as risks or opportunities which would affect the…

Q: Define Risk aversion

A: A risk averse saver is an investor who favors inferior returns with recognized risks somewhat than…

Q: Define symmetric hedge

A: Introduction: It is a technique that reduces risk, like currency fluctuations, stock price…

Q: What is the Aggregating Risk over Time?

A: Aggregating Risk over time is the measure of a solitary customer's presentation of a foundation or…

Q: What is the Security Market Line (SML) ?

A: Answer: A security market line (SML) is a line that representing the relationship between systematic…

Q: What Does RiskReally Mean?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: What is the value of the security market line?

A: Security Market Line: The graphical representation of Capital Asset Pricing Model is known as…

Q: How does a nonsymmetric hedge differ from a natural hedge? Provide an exampleof a nonsymmetric…

A: Natural Hedge denotes to the circumstances under which total risk might be removed by means of an…

Q: Explain types of Security Issuers and Guarantors?

A: Types of security issuers are described as follows: Banks– Banks generally issue securities to meet…

Q: What is event risk?

A: Event risk is the likelihood of a sudden event adversely affecting an organization, industry, or…

Q: What are the benefits of netting?

A: Answer Defination:- Netting is a process by which an exposure or obligation is reduced by combining…

Q: Explain Derivative security?

A: Derivatives security: A derivative security is considered as a financial instrument whose value is…

Q: What is perfect hedge?

A: Hedge: A hedge is referred as an investment to decrease the risk of opposing price movements in an…

Q: What is an Anti-dilutive Security

A: Anti-dilutive securities are those securities that a company has issued and which can get converted…

Q: What is securitization?

A: Introduction: Finance reflects a broad variety of spaces where decisions can be taken relative to…

Q: Is funding a type of risk?

A: Funding means providing the funds to the party and charging interest rates from them. Firms need…

Q: Define fair value hedges.

A:

Q: What are the rules of safe harbor?

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: Define short hedges

A: A strategy through which the potential loss reduces that occurs from the movement of the asset's…

Q: What are some types of real options?

A: Real options is defined as a capital budgeting decision with which the management may make a future…

Q: What is the reinvestment rate assumption when using MIRR?

A: Modified Internal Rate of Return: This method is used to rank investments or projects for an…

Q: Define asymmetric hedge

A: A strategy that helps to reduce the loss which occurs from the movement of the asset's price is term…

Q: How are total risk, nondiversifiable risk, and diversifiable risk related? Why is nondiversifiable…

A: Total risk is measured by the standard deviation of returns; it has two elements non-diversifiable…

Q: What is exchange risk, as distinct from exposure?

A: Foreign exchange risk or foreign exchange exposure refers to the financial risk associated with a…

Q: What are the differences between bottom-up and top-down approaches to security valuation? What are…

A: A top-down method to security evaluation starts with an examination of the worldwide and national…

Q: State difference between sureties and security?

A: In development contracts, if a worker for hire neglects to play out the works, the business would…

Q: Define risk

A: Risk can be defined as whenever there are chances that the investments’ actual outcomes are…

Q: Define the term risk?

A: Types of risk: Investment risk Market risk Inflation risk Business risk Liquidity risk

Q: what does a perfect hedge mean? when is a hedge perfect?   by ur own word please

A: A perfect hedge is a position taken by an investor that eliminates the risk of an existing position…

Q: What is a “natural hedge”? Give some examples of natural hedges.

A: Natural hedge is a risk management method to reduce the risk of investing in financial instruments…

Q: What is long hedges?

A: The long hedge is the long future position in future contract. The long hedge is used to stabilize…

Q: what is opportunity risk

A: Opportunity risk is a the risk off loosing a better opportunity i.e. if you have invested in a…

Q: What is country risk?

A: Country risk make a case for the possibilities of a distant government's financial organization…

Q: What does Security Market Line Capture?

A: Security market line (SML) is a straight line sloping upward depicting an expected rate of return as…

Q: What is a “convertible security”?

A: Securities: Securities refers to a negotiable financial instrument that holds some type of monetary…

Q: What is value at risk, VaR?

A: Value at Risk (VaR) is a financial metric that estimates the risk of an investment. More…

Q: isk with practical example

A: Political risk Political risk is the risk an investment's returns could suffer as a result of…

Q: Why are safety stocks required?

A: Safety stock is an additional quantity of an item held by a company in inventory to reduce the risk…

Q: What is an inter vivos trust?

A: Inter Vivos Trust: An inter vivos trust is a kind of trust which is made in the lifetime of the…