Answer:
The main difference lies in the motive of the two parties. The main motive of the hedger is to hedge(minimize) the risk from the occurrence of some events. The motive of the speculator is to gamble in the market in order to make the profit by buying/selling the derivative products.
Hedger is a risk avoider and speculater is risk lover. Speculator is high riskier in market,it is short term, hedger is minimizing risk from occurrence of some event.
Hedger is a risk avoider and speculater is risk lover. Speculator is high riskier in market,it is short term, hedger is minimizing risk from occurrence of some event.
| Previous Question | Next Question |
| What is Outsource? | Define fair value? |