A Hedge is…

August 10th, 2009

A hedge is a financial strategy used to neutralize the risk of a certain bet. For example, an investor might buy a security in the health-care sector while hedging his or her bet by purchasing another security in the finance sector. The reason for the difference in investments is that if the value of one security goes down, the other might still go up. In plain terms it means covering your investments.

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