Regret risk: Difference between revisions
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imported>Doug Williamson m (Spacing 20/8/13) |
imported>Doug Williamson (Expand.) |
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1. | 1. | ||
When hedging an exposure, the risk of being locked in at an unfavourable hedged rate, and suffering an opportunity loss. | |||
2. | 2. | ||
The term 'regret risk' is also used more broadly to include the possibility of later financial regret at <u>not</u> making an operational or financial commitment, in additional to the narrower definition in 1. above. | The term 'regret risk' is also used more broadly, to include the possibility of later financial regret at <u>not</u> making an operational or financial commitment, in additional to the narrower definition in 1. above. | ||
For example, | For example, a decision to leave a financial exposure unhedged, which may turn out with hindsight not to have been the best decision. | ||
== See also == | == See also == | ||
* [[Opportunity loss]] | * [[Opportunity loss]] | ||
Revision as of 06:53, 2 May 2016
1.
When hedging an exposure, the risk of being locked in at an unfavourable hedged rate, and suffering an opportunity loss.
2.
The term 'regret risk' is also used more broadly, to include the possibility of later financial regret at not making an operational or financial commitment, in additional to the narrower definition in 1. above.
For example, a decision to leave a financial exposure unhedged, which may turn out with hindsight not to have been the best decision.
