Option c) hedging is the correct answer.
Explanation:
- A common method used in the stockmarkets is hedging which is
done by asset allocation(expanding an investor’s portfolio with a
different type of assets)
- Hedging is a risk management strategy applied to compensate
losses in investments by choosing a contradictory position in a
related asset.
- Portfolio managers, individual investors, and companies use
hedging methods to decrease their vulnerability to numerous
risks.
- A risk management strategy is helpful to restrict or compensate
the chance of loss from inconstancies in the prices of stocks,
currencies, or securities.
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