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Financial institutions use derivatives instruments to hedge their assetliability risk exposures. The financial institutions` goal is to reduce the value of their net worth that
Financial institutions use derivatives instruments to hedge their assetliability risk exposures. The financial institutions` goal is to reduce the value of their net worth that is at risk due to adverse events.
- What are the reasons why a financial institution may choose to hedge its portfolio selectively?
- Substantiate your response with examples
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