Final answer:
A good way to hedge against systematic risks is to invest in a variety of asset classes, use derivatives, and invest in managed funds.
Step-by-step explanation:
A. Invest in a variety of asset classes.
B. Use derivatives.
C. Invest in managed funds.
D. All of the above.
Hedging against systematic risks can be done in several ways. One effective strategy is to invest in a variety of asset classes, such as stocks, bonds, real estate, and commodities. This diversification helps to mitigate the impact of any one asset class experiencing a significant decline.
Another way to hedge against systematic risks is to use derivatives, such as options and futures contracts. These financial instruments allow investors to protect their investments by taking positions that offset potential losses.
Investing in managed funds, such as mutual funds or exchange-traded funds (ETFs), can also provide some level of hedging against systematic risks. These funds are typically professionally managed and offer exposure to a diversified portfolio of assets.
The best strategy for hedging against systematic risks is to combine all of these approaches, investing in a variety of asset classes, using derivatives when appropriate, and including managed funds in your investment portfolio.