Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
5th Edition
ISBN: 9780134734200
Author: Frederic S. Mishkin
Publisher: PEARSON
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Question
Chapter 14, Problem 1LO
To determine
The definitions of a hedge, a long position and a short position
Context Introduction:
Hedge − To lower the risks of unfavorable movements in prices of assets, the investment that is made is a hedge.
Expert Solution & Answer
Explanation of Solution
Hedge funds − The Investment institutions and individuals having a high net worth investment in a lot of securities like bonds, stocks, real estate etc., and this prevalent investment vehicle is called Hedge fund. These funds which are highly risky in comparison to the commonly available investments like mutual funds, aim for excessive returns.
Long position − Buying stocks and owning the stocks are referred to as long position. With the expectation that an asset value would increase in future, buying securities like stocks are referred to as long position.
Short position − The investment tactic of selling stocks, not owned or stocks borrowed in the open market is referred to as a short position.
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Chapter 14 Solutions
Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
Ch. 14 - Prob. 1LOCh. 14 - Prob. 2LOCh. 14 - Prob. 3LOCh. 14 - Prob. 4LOCh. 14 - Prob. 5LOCh. 14 - Prob. 6LOCh. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - Prob. 3QCh. 14 - Prob. 4Q
Ch. 14 - Prob. 5QCh. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - Prob. 8QCh. 14 - Prob. 9QCh. 14 - Prob. 10QCh. 14 - Prob. 11APCh. 14 - Prob. 12APCh. 14 - Prob. 13APCh. 14 - Prob. 14APCh. 14 - Prob. 15APCh. 14 - Prob. 16APCh. 14 - Prob. 17APCh. 14 - Prob. 18APCh. 14 - Prob. 19APCh. 14 - Prob. 20APCh. 14 - Prob. 21APCh. 14 - Prob. 22APCh. 14 - Prob. 23APCh. 14 - Prob. 24APCh. 14 - Prob. 25APCh. 14 - Prob. 1DAPCh. 14 - Prob. 2DAPCh. 14 - Prob. 1WECh. 14 - Prob. 2WE
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