What is hedging? What is funding? What is derivatives market in a lay man language?
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Answer Posted / Rahul Jassar
Hedging is a strategy used to reduce the risk of potential losses by taking an opposite position in the market. For example, a farmer may buy futures contracts for wheat to protect against falling prices. Funding refers to providing capital or financing for an investment or project. The derivatives market is where financial instruments such as options, futures, and swaps are bought and sold.
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