DESIGN OF METHODOLOGY OF HEDGING INSTRUMENT CHOICE

Abstract

At the present stage the efficiency of functioning of the enterprise depends on the right administrative decisions in the conditions of the socially-focused economy. One of such decisions is the application of hedging operations for the purpose of minimization of expenses and losses emerging in the case of unfavourable changes on the market. Within the limits of this article the authors highlight the major factors which influence the for-mation of cost of hedging. The application of the determined factorial analysis, using the technique of chain substitutions, will allow analysing the degree of influence of change of essential factors on the cost of hedging operations. In the result of application of this technique the management of the enterprise will be able to make the right decision on the choice of the derivative.