ManagementParadise.com : Worlds Leading Management Portal. MBA | Classroom, Boardroom and Beyond


Go Back   ManagementParadise.com Forums - Your MBA Online Degree Program and Management Students Forum for MBA,BMS, MMS, BMM, BBA, students & aspirants. > Projects HUB for Management Students ( MBA Projects and dissertations / BMS Projects / BBA Projects > Resolve Your Query - Get Help and discuss Projects > Service Sector Management

Insurance and Hedging compared

Insurance and Hedging compared

Discuss Insurance and Hedging compared within the Service Sector Management forums, part of the Resolve Your Query - Get Help and discuss Projects category; Insurance and Hedging compared The concept of hedging is to transferring the risk to the speculator through purchase of future ...

Reply

 

LinkBack Thread Tools Display Modes
Advertisements
Insurance and Hedging compared
Old
 (1 (permalink))
Sunanda K. Chavan
sunandaC has a spectacular aura aboutsunandaC has a spectacular aura aboutsunandaC has a spectacular aura about
 
sunandaC
Management Paradise Guru
 
Status: Offline
Posts: 6,685
Join Date: Jul 2010
Insurance and Hedging compared - October 11th, 2010

Insurance and Hedging compared

The concept of hedging is to transferring the risk to the speculator through purchase of future contracts .An insurance contract, however, is not the same thing as hedging .Although both technique are similar in that risk is transferred by a contract, and no new risk is created, there are some important difference between them.

First, an insurance transaction involves the transfer of insurable risks, because the requirement of an insurable risk generally can be met .However, hedging is a technique for handling risks that are typically uninsurable ,such as protection against a decline in the price agriculture products and raw materials.

A second difference between insurance and hedging is that insurance and hedging is that insurance can reduce the objective risk of an insurer by application of the law of large numbers. As the number of exposure units increases, the insurer’s prediction of future losses improves, because the relative variation of actual loss from expected loss will decline .thus, many insurance transactions reduce objective risk.

In contract, hedging typically involves only risk transfer , not risk reduction .The risk of adverse price fluctuation is transferred because of superior knowledge of market conditions .The risk is transferred, not reduced, and prediction of loss generally is not based on the law of large numbers.
Advertisements
Friends: (0)
Reply With Quote
Related to Insurance and Hedging compared
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
Position of Women in India compared to other nations. Ankit Gokani HOT Debates - The Big Fight 7 1 Week Ago 08:19 PM
Hedging Abhijeet S Financial Management ( FM ) 0 September 10th, 2010 07:40 PM
Hedging Abhijeet S Financial Markets 0 September 10th, 2010 11:41 AM
leadership compared Ruhi Agrawal Human Resources Management 1 February 16th, 2009 06:02 PM
Brain Age Mythology Compared to What Really Improves Cognitive Health Maya Raichura Articles !! 0 June 29th, 2008 06:30 PM
 

Reply

Bookmarks

Tags
compared, hedging, insurance

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On


Login
Forgot Password?  New User?
  

» Ads





» Recent Threads

Today Nifty Trend...
Last post by Research Gravita
2 Minutes Ago 09:51 AM
0 Replies
F/s....Nikon D610 24MP...
Last post by Carlos Chub
17 Minutes Ago 09:36 AM
0 Replies
F/S...Nikon D4 16MP...
Last post by Carlos Chub
23 Minutes Ago 09:31 AM
0 Replies
Retail Management Notes ( 1 2 3)
Last post by Bhautik Kawa
1 Hour Ago 08:11 AM
29 Replies
BBM PROJECTS
Last post by Jagruti Shah
11 Hours Ago 10:09 PM
2 Replies
QUESTIONNAIRE on Soft...
Last post by Jagruti Shah
11 Hours Ago 10:07 PM
2 Replies
Service marketing notes ( 1 2)
Last post by Jagruti Shah
11 Hours Ago 10:03 PM
12 Replies
Pest Analysis On Zara
Last post by Jagruti Shah
11 Hours Ago 10:01 PM
1 Replies
List of projects and... ( 1 2 3... Last Page)
Last post by Jagruti Shah
11 Hours Ago 10:00 PM
49 Replies
Famous Inventions!
Last post by Jagruti Shah
11 Hours Ago 09:55 PM
5 Replies
Types of Group...
Last post by Jagruti Shah
12 Hours Ago 09:53 PM
5 Replies
Customer Relationship...
Last post by Jagruti Shah
12 Hours Ago 09:52 PM
1 Replies
Project on Service Tax
Last post by Jagruti Shah
12 Hours Ago 09:50 PM
9 Replies
Accounting Standards......
Last post by Krunal Dhabhi
12 Hours Ago 09:02 PM
5 Replies
INFLATION - ITS CAUSES...
Last post by Krunal Dhabhi
12 Hours Ago 09:00 PM
2 Replies

» Projects Helpline

Retail Management Notes
Last post by Bhautik Kawa
1 Hour Ago 08:11 AM
supply chain management
Last post by Swapnil Chormale
13 Hours Ago 07:58 PM
140 topics of TYBMS
Last post by Reena Dapat
1 Day Ago 08:11 PM
TYBMS PROJECT TOPICS...
Last post by Raj Verma
1 Week Ago 07:26 PM
ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.


Management Paradise
About Us
Press
Jobs
Contact Us
Kartik Raichura
Legal
Terms & Conditions
Privacy Policy
Disclaimer
Copyrights
Help
Zeitgeist
Support
FAQs
Tour
Feedback
Partners
Follow
Copyright © 2004 - 2013 Management Paradise. Site Developed by Available.co.in