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Basics
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Credit
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Credit derivatives terminology
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Vinod Kothari Hedged item: When a derivative has been used for the purpose of hedging the risk of any existing or future probable asset or cashflow of an entity, the item whose risk is hedged by the derivative is called the hedged item. For example, if entity has bought protection for the credit risk associated with a particular loan exposure held by it, the loan is the hedged item, and the default swap is the hedging instrument. See also under hedging. |
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