What are the types of loss that are dealt with through the use of hedging in a financial risk management?
Ans.1. There are various types of loss that are deal with through the use of hedging in a financial risk management:
Financial loss: An investers are likely to loss all his/her investment while deal with use of hedging.
Foreign exchange loss: Due to unstability in foreign exchange rate, use of hedging is not able to get any return.
Interest rate loss: Due to market instability, interest rate are likely to change, hedging does not work in every cases.
Reputation loss: An investers are left that market if they get continously losing their money.
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