3 points Hedging is a strategy used by purchasing organizations to offset (and thereby reduce) risk, generally accomplished with options (caps), swaps, or costless collart. A perfect hedge is one that eliminates the possibeify of future (additional) gain or loss by exactly offseting the exposure being hedged. How the price risk is managed when customers (purchasing organization) buys a fixed-price swap (figute below)? customers lock in a known price regardless of what happens to the market price. difference between the price paid and market price reflects the premlum paid to have the insurance. customers buy a ceiling beyond which their price will not rise