Question

Why does hedging work?

Answer 1

Hedge is very important for human life. Hedging is called advanced investing strategy. People insure themselves for any undesired event. For an example a personal takes an life insurance is an example of Hedge. The person insures his family in case of death, disability, insolvent poor health etc. If we take an example of death when the source of income is not there then in the case the family of insured will get the insured amount plus other benefits and other monetary helps from the company. So because of these benefits hedging work

Hedging insures the person from the negative event that is why hedging works.