Question

Who is responsible (within an organization) for making decisions regarding hedging and evaluating the pros and cons of this practice? Would a company utilize outside sources for this activity?

Answer 1

The person responsible for hedging and taking decisions regarding hedging and calculating the pros and cons of an organisation within the organisation is the finance manager or if there is any committee for financial department.

the financial manager should take care about the financial resources of an organisation.

Then the financial manager follow several methods to arrange financial resources and also to invest the excess financial resources of the organisation in that matters one of the method is hedging, through hedging the finance manager can raise some funds to the organisation.

2. Yes, the company may utilised outside organisations or outside resources for this activity

all the people are not having a sound knowledge about the stock market or exchange market hence for the purpose of hedging and for investing the excess funds of an organisation they may give this activity for outsourcing in the following way

all excess fund was given to a person who will be called as fund manager or portfolio manager. that person is responsible for hedging and investing and reinvesting in the stock market or exchange market. the person who is called fund manager or portfolio manager will give a return on our money by taking some percentage of commission.

Hence, the finance manager is responsible for the hedging within an organisation and the companies may outsource this activity for raising funds or getting income through hedging.

These are all the information required to solve the above given two questions.

I hope, all the above given information and explanations are useful and helpful to you.

Thank you.