3.1Derivatives Para reads ..significant financial price risk can be hedged....( non finanacial price risk can be hedged through commodities derivatives).. My questions is: isnt change in commodity price an item of finanacial price risk? Then what items are classified as non financial price risks? Regards Jenil
I think the chapter uses the categorisation used for futures. So "financial futures" are those such as stock or bond futures, currency futures or interest rate futures. Non-financial futures are just "commodity futures". So using the same categorisation, non-financial risk can be hedged with commodity futures.
