Ken, you did a marvelous job explaining what about hedging. I was personally unfamiliar
with the term hedging. I have though heard about hedge funds. After reading your submission,
it all makes since now to me. After reading your submission and the article titled, “Hedge Funds
Friend or Foe?,” I have grasp the concept of hedging and the purpose of the funds. Kenneth,
you stated that hedging is, a financial instrument used to reduce or eliminate the risk of
adverse price movements for future payments or purchase.
In “Hedge Funds Friend or Foe?,” it states that, “in South Africa, many hedge funds
manage to deliver excellent risk adjusted returns after all fees (Wagenaar, 2017, par. 1).” I
thank you for your explanation of the term. Hedging reduces or eliminates financial risk and
hedge funds are used to help eliminate fees that may accrue when hedging is used. Both are
tools that are used during the investment process.
References
Wagenaar, E. (2017). HEDGE FUNDS FRIEND OR FOE? Accountancy SA, , 22-23. Retrieved from
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