Can anyone give their opinin on Active hedging of financial exposures is not generally accepted among financial managers around the world. Some argue that financial management cannot alone increase the value of the firm and that a firm is better off managing its core business risks while leaving itself exposed to some (if not all) financial risks.
Do you agree or disagree, and why or why not(briefly).

Hai !

I want to explain about hedge in finance and Categories of hedgeable risk.

In finance, a hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity. Typically, a hedger might invest in a security that he believes is under-priced relative to its "fair value" (for example a mortgage loan that he is then making), and combine this with a short sale of a related security or securities. Thus the hedger is indifferent to the movements of the market as a whole, and is interested only in the performance of the 'under-priced' security relative to the hedge. Holbrook Working, a pioneer in hedging theory, called this strategy "speculation in the basis,"[1] where the basis is the difference between the hedge's theoretical value and its actual value (or between spot and futures prices in Working's time).

Categories of hedgeable risk

For the following categories of the risk, for exporters, that the value of their accounting currency will fall against the value of the importers, also known as volatility risk.

Interest rate – the risk, for those who borrow, that interest rates will rise, (or for those who lend, that they fall)
Equity – the risk, for those whose assets are equity holdings, that the value of the equity falls
Futures contracts and forward contracts are a means of hedging against the risk of adverse market movements. These originally developed out of commodity markets in the nineteenth century, but over the last fifty years a huge global market developed in products to hedge financial market risk.

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