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HOW TO BET?

 

       Say, two teams, A and B is clashing in the finals of a cricket-international cup.  Betting is going on, of course illegally.  How to bet wisely and not to lose any money?  There is a way.

      Tom strongly thinks that 'A' is going to win.  You bet with Tom on the basis; If 'A' team wins, you will pay Tom 2 dollars. If 'B' wins, Tom will pay you 3 dollars.".  Tom will be happy and accept the bet.

      Bob thinks only 'B' team has winning chance.  Hence you bet with Bob on opposite terms.  That is, if 'B' wins, bob gets 2 dollars from you, otherwise you get 3 dollars from him.

      Whatever may be the outcome of the match, you will always win.  In the victory of A or B, you will get 3 dollars from Tom or Bob and you pay out 2 dollars to one of them.  Hence, you will gain one dollar whatever may be the result of the match.

      This is called "Hedging". It is used by the investment fund managers.  The fund is called "Hedge fund".

    A  Simplified explanation is given above.  Hedging is used in the equity market and involves complex investments.  It is done at high speed using computers.

      "Money should not be idle.  It should be invested wisely and made to work".  
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