why we always use long position for hedge
Ask the Tutor ACCA AFM
why we always use long position for hedge
We don't always use a long position!
It depends what we are hedging - the risk associated with the receipt of foreign currency; the risk associated with the payment of foreign currency; the risk associated with the borrowing of money; or, the risk associated with the depositing of money. (and also which instruments we are using)
For some of them we take a long position and for some a short position.
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