Reference no: EM131293333
Discussion-Hedging and Risk Mitigation
Hedging is a financial practice that has been turned into a set of financial products. These provide direct risk mitigation by balancing investment portfolios or investing in commodity futures to control some of the volatility of their future costs by using present value money (Office of the Comptroller of the Currency, U.S. Department of Treasury, n.d.).
Using the online library resources, and the Internet, research risk mitigation and review the following article:
• Lesage, X., & Ronteau, S. (2012). Assessing embedded agency of entrepreneurs in context of internationalization and innovation: An exploratory research. International Business Research, 5(6), 62-72. (ProQuest Document ID: 1021192087) https://search.proquest.com.libproxy.edmc.edu/docview/1021192087?accountid=34899
Based on your research, respond to the following:
• Explain the concept of hedging, and describe some key hedging practices. How do companies use derivatives to hedge risk?
• What are the ethical considerations in the derivatives market? Should organizations consider them when investing in derivatives?
Give reasons in support of your responses. Be sure to cite any relevant resources.
Write your initial response in approximately 300 words. Apply APA standards to citation of sources.
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: Explain the concept of hedging, and describe some key hedging practices. How do companies use derivatives to hedge risk? What are the ethical considerations in the derivatives market? Should organizations consider them when investing in derivatives?
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