Copyright 2010 Pearson Addison-Wesley. All rights reserved.Chapter 13 Financial DerivativesCopyright 2010 Pearson Addison-Wesley. All rights reserved.14- 213.1 Hedging Engage in a financial transaction that reduces or eliminates risk Long position= buying of a security with the expectation that the asset will rise in value. Short position= agree to sell securities at future date Hedging risk involves engaging in a financial transaction that offsets a long position by taking an additional short p
