Hedging In The Middle Ages - Deepstash

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Hedging In The Middle Ages

Future markets are nothing new, and before the stock market, they existed in many places in the form of crop trade, back in the middle ages.

Farmers would hedge their risks by selling their crops to consumers at preset prices on a predetermined future date. This provided assurance to a risk-averse farmer that his crop price would not fluctuate in the future.

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MORE IDEAS FROM THE SAME ARTICLE

Many companies use the insights of financial managers and external consultants to manage their risk. A one-size-fits-all solution is not yet in existence when it comes to risk management.

Corporations managing risk themselves face a fundamental question: why do they need to do it? Individuals and investment groups can manage the risk on their own. Making good investments seems like a better option.

Top leaders and managers can benefit from these broad guidelines on risk-management issues:

Top-level managers and financial engineers must work in tandem to develop and execute a strong risk-management strategy. The three basic premises for this corporate strategy are:

Risk management through hedging allows companies to borrow from themselves, transferring funds to where they are needed the most.

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