Hedging is a strategy used to manage risk in financial markets. It involves using financial instruments to counteract the impact of unfavourable price movements. For instance, a company may use derivatives to hedge against currency fluctuations and protect itself from exchange rate volatility. This strategy aims to reduce exposure to market uncertainties and provide a safeguard against unfavourable events, ultimately fostering financial stability in unpredictable market conditions. 1. Explain the specific instruments or methods used and the impact of the hedging strategy on the company's overall financial stability. 2. Discuss the considerations and challenges that are faced by companies when deciding whether to implement a hedging strategy