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An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations. 

Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge).


Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.


hese loansicon1.png create a currency risk for the lender. For example, if a bank in the United States borrowed dollars and lent pesos to a Mexican firm, it might make money on the interest but lose money if the value of the peso dropped. To avoid this risk, these banks hedge their loans. The most common hedge is a currency swap, which is a promise to deliver a certain amount of a currency on a particular date, at a particular exchange rate. Banks will create a currency swap with another company that is either speculating on currencies or trying to hedge the opposite currency trade. This mitigates most currency risk


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Remember the time I left my card at your club when we were down their for the Jets game?  I fell in love like 5 times that evening.  


Just remember the little people when you open this fine high class establishment. 

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