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HEDGE: A method of protecting against financial (or other types) of loss by counterbalancing an action. This is commonly seen in the financial markets when investors buy options or futures contracts to protect themselves against price changes. A hedge is essentially a form of insurance. An investor hopes the price of a financial asset doesn't fall, but buying a futures or options contract can reduce the loss if this occurs.

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VARIABLES

Quantities, usually represented as symbols, that can take on one of a set of values. A variable is "variable" because its value can "vary." A primary goal of economic analysis is to determine the specific value that a variable takes on under specific circumstances.

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Junk bonds are so called because they have a better than 50% chance of default, carrying a Standard & Poor's rating of CC or lower.
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