______ is a risk management strategy employed to offset losses in investments by
taking an opposite position in a related asset.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Hedging.
- Hedging in finance refers to protecting investments.
- A hedge is an investment status, which aims at decreasing the possible losses suffered by an associated investment.
- Hedging is used by those investors investing in market-linked instruments.