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One argument for hedging by American Barrick was - it would make funds available when there...

One argument for hedging by American Barrick was - it would make funds available when there are attractive investment opportunities available. Do you agree? Explain

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Answer #1

Hedging means to invest in a way so as to reduce the risk while making that investment.

American barrick is a gold mining company which hedges its gold in a way where it can have financial stability and proper management of the risk.

Hedging is done by American barrick where it can make financial predictions, predictions related to volatility and fluctuations of gold prices in order to move ahead with proper planning.

All this helps the company in investing at only those places where there are great opportunities. So, yes the above said argument is correct.

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